The Commercial Loss Doctrine, DePaul Business & Commercial Law Journal

more+
less-

The line between tort and contract law has never been definitively drawn, especially when it comes to product liability law and construction law. In some instances, the theories have become so intertwined that practitioners have adopted the nomenclature of "contort" to designate claims that contain both theories of tort and contract. In an attempt to keep the line between contract claims and tort claims distinguishable, most states have adopted some form of the Commercial Loss Doctrine. Originally applied in product liability cases, the traditional Commercial Loss

Doctrine holds that when a product is defective, a party may not recover in tort unless the defect causes personal injury or damage to property other than the product itself and does so via a sudden and calamitous event. I will refer to this definition as the traditional Commercial Loss Doctrine or traditional Moorman doctrine throughout this paper. However, much of the confusion in the application of the Commercial Loss Doctrine stems from the fact that this definition only applies to product liability law and not to other areas of law, such as service contracts or construction

contracts.

I will attempt to make two arguments in this article. Part I of this article argues that when courts need to determine whether the Commercial Loss Doctrine applies, they should not begin by asking whether the loss is "economic." Instead, the court should analyze whether the duties between the parties arose via the contract between the parties or via extra-contractual duties which govern the relationship between the parties. If the latter, then tort claims should be allowed. In determining whether extra-contractual duties exist, courts must articulate rational or historical policy

reasons for the existence of such duties. Second, I also argue herein that the Commercial Loss Doctrine should be applied to bar tort claims in the construction industry because the policy reasons for allowing tort claims in product liability cases do not apply in the construction industry.

8 DePaul Bus. & Comm. L.J. 339

LOADING PDF: If there are any problems, click here to download the file.

Published In: Construction Updates, Insurance Updates, Products Liability Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© William Seth Howard | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »