Also known as: economic loss no duty rule · economic loss rule · pure economic loss rule
Written by attorneys — see sources below.
A tort doctrine, limited in Florida to products-liability cases, that bars recovery in negligence for purely economic loss unaccompanied by personal injury or property damage. Outside the products-liability context the rule no longer prevents tort claims arising from contractual relationships. Claims for lost profits or increased costs must instead proceed under contract or independent tort doctrines.
Clearline Electric negligently failed to maintain a substation, causing repeated brownouts that forced Orion Components to pay overtime wages and rush freight charges to meet its supply contracts. Orion sued Clearline in negligence for those added expenses alone, with no claim of physical damage to its equipment or personnel. The court held that the economic loss rule is limited to products-liability cases and therefore did not bar the claim.
Excavation Technologies relied on Columbia Gas's public maps when planning a project but the maps were inaccurate due to negligence. The error caused Excavation Technologies to miss a deadline and lose a valuable contract with a third party. Excavation Technologies sued Columbia Gas in negligence for the resulting lost profits. The court held that the economic loss no-duty rule barred recovery because the harm was purely pecuniary and unaccompanied by physical damage.
Excavation Technologies, Inc. was preparing to perform excavation work for a waterline extension project. Before beginning the work, the company requested that Columbia Gas Co. of Pennsylvania mark the locations of its gas lines around the work sites in accordance with the requirements of the One Call Act. Columbia Gas improperly marked some of the lines and failed to mark others entirely. As a result, Excavation Technologies struck various gas lines during the course of the project. These incidents hampered the excavation work and caused significant delays, resulting in economic damages of $74,502.06. Excavation Technologies did not sustain any physical injury or property damage. The company then filed suit against Columbia Gas on a theory of negligent misrepresentation under Section 552 of the Restatement (Second) of Torts. The suit alleged that the utility had failed to comply with its statutory duties under the One Call Act. Columbia Gas responded by filing preliminary objections in the nature of a demurrer, arguing that the economic loss doctrine barred any recovery for purely economic damages. The trial court sustained the preliminary objections and dismissed the action. Excavation Technologies appealed the dismissal to the Superior Court, which affirmed the trial court's order in an en banc decision. The Supreme Court of Pennsylvania subsequently granted allowance of appeal to address the legal question of whether Section 552 imposes liability in these circumstances.
View caseYes. The rule denies recovery in negligence for pecuniary harm that does not derive from physical injury to person or property, even when the loss consists of a third party's failure to enter or perform a contract. Courts channel such claims into intentional interference or contract doctrines instead.
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No. The economic loss no-duty rule prevents recovery for purely economic losses such as increased overtime or overhead that result from negligent interference with contractual performance when no physical harm occurs. The claim belongs in contract, not tort.
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No. Although the Florida Supreme Court limited the rule to products liability, the broader common-law version continues to bar negligence recovery for purely economic loss arising from negligent interference with contracts or economic expectancies in other settings.
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