The Economic Loss Doctrine: Distinguishing Economic Loss From Non-Economic Loss

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Publication Information

Ralph C. Anzivino, The Economic Loss Doctrine: Distinguishing Economic Loss From Non-Economic Loss, 91 Marq. L. Rev. 1081 (2008)

Source Publication

91 Marquette Law Review 1081 (2008)


The economic loss doctrine requires that courts distinguish economic loss from non-economic. Those damages found to be economic loss can only be recovered through contract law. On the other hand, damages deemed to be non-economic loss are recoverable through tort law. In nearly every state, the theories are mutually exclusive. Therefore, a case can only proceed as a tort or contract case, but not both. The critical determination is whether the damages involved are economic or non-economic losses.

When a product fails and causes property damage, determining whether the damages are economic or non-economic becomes difficult. Distinctions must be made between damage to the product itself, damage to the system of which it is a part, and damage to "other property." There is no consensus rule on how to make such distinctions. In addition, even though one may conclude that the damages are non-economic losses, there are circumstances where the non-economic loss is recoverable only through contract law. The purpose of this Article is to distinguish economic loss from non-economic loss and to develop a workable rule for making the same distinction when a failed product causes property damage.