The Economic Loss Rule and Private Ordering
15 Pages Posted: 20 Nov 2006
My objective in this Article is to provide some perspective on the economic loss rule, the proper statement of which has figured prominently in debates about the proposed Restatement (Third) of Torts: Economic Torts and Related Wrongs. Part I describes the varieties of the economic loss rule and the Article's focus on the rule's application to third-party cases. Part II summarizes the history of liability for third-party economic loss. Part III describes the conceptual underpinnings of the rule, its application in third-party cases, and its treatment in the proposed Restatement. Part IV criticizes the private ordering claim underlying the rule, particularly in light of recent changes in contract law. Part V situates the debates about the rule in the unmaking of neoclassical law and contemporary political changes. Part VI concludes with a warning about the historical significance of the adoption of elements of the rule in the Restatement.
This Article is based on a paper presented at the Dan B. Dobbs Conference on Economic Tort Law at the University of Arizona James E. Rogers College of Law, March 3-4, 2006.
Keywords: economic loss, economic loss rule, pecuniary loss, torts, economic torts, economic negligence, contract law, contracts, negligence, misrepresentation, third-party beneficiary, drug testing
JEL Classification: K12, K13
Suggested Citation: Suggested Citation