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University of Memphis Law Review

Abstract

In its broadest form, the “economic loss rule” stands for the proposition that contracting parties who suffer purely economic damages may not recover in tort.1 The doctrine reasons that, in cases where there are no personal injuries or property damage, contract law— and not the law of tort—provides the appropriate avenue for recovery. This rule originated in the context of products liability,3 and it exists to preserve the boundary line between contract and tort law when both theories could ostensibly apply.4 However, “the economic loss rule” is a bit of a misnomer because there is not one unified rule.5 Instead, there is widespread disagreement about the contours of the doctrine’s application and its numerous exceptions.

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