Extending the Economic Loss Rule to Service Contracts in Arizona


From time to time, I've reported on important new decisions from around the country on the scope of the economic loss rule... Last month, the Arizona Court of Appeals gave the defense bar an important new precedent, extending the economic loss rule to service contracts.

First, to review: economic losses are frustrated commercial expectations: “it wasn’t worth what I paid,” or “it broke,” or “I didn’t make as much money as I expected.” The economic loss rule, simply stated, holds that where a plaintiff has suffered nothing but economic losses, tort claims are barred, and he or she must sue, if at all, on the contract. Most states have found that the economic loss rule arises from a desire to promote contractual certainty by holding parties, in the vast majority of cases, to their bargain.

Please see full article below for more information.

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