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The Economic Loss Doctrine

·

By

ACL


The short answer

Under the economic loss doctrine, a party generally cannot recover purely financial losses in negligence when there is no personal injury or damage to other property. Those losses belong in a contract claim.

Where it fits in your case

Often raised in a motion to dismiss when a business pleads negligence alongside breach of contract.

What to expect

  • The rule comes from Moorman Manufacturing Co. v. National Tank Co. (1982).

  • Exceptions include sudden and dangerous occurrences causing property damage, intentional fraud, and negligent misrepresentation by those in the business of supplying information.

  • Tort versus contract. Whether a claim is really about the bargain often decides which rules apply.

What we need from you

The contract, if any, and details of every kind of loss suffered.

Common misconceptions

  • “Negligence is always an option.” Not for purely economic losses.

  • “Calling it a tort gets around the contract.” Courts look at substance.

This resource provides general information about Illinois and federal law, not legal advice about your situation. Reading it does not create an attorney-client relationship. The right answer often depends on the specific facts, contract language, policy wording, and deadlines involved.

ALLISONCHOLAW / BUSINESS LITIGATION & COUNSEL

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