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Architects'tort Liability For Economic Damages

Wednesday, April 04, 2007 12:00 pm

Architects'tort Liability For Economic Damages

Architects are increasingly facing liability in tort for negligent and intentional misrepresentations they make in the plans and specifications they create for commercial construction projects. This article provides a brief overview of the current law on an architect's liability in tort for economic damages, and includes a look at the economic loss doctrine's role in limiting liability.

Contract Remedies Only

A few states refuse to let contractors or subs sue architects in tort for negligent misrepresentation or intentional conduct (misrepresentation/fraud), and instead insist that the only remedies are whatever remedies the parties set out in the contract. These courts base their decisions at least in part on the economic loss doctrine.

The economic loss doctrine or rule essentially says that if a party suffers only economic losses -- not personal injuries or property damage -- that party cannot bring a lawsuit based in tort law. Economic losses may include lost profits and repair or replacement costs (Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69 (1982)).

States that use the economic loss doctrine to bar tort suits against design professionals include Washington (Berschauer/Phillips Const. Co. v. Seattle Sch. Dist. No. 1, 124 Wn. 2d 816 (1994)), Colorado (BRW, Inc. v. Dufficy & Sons, Inc., 99 P. 3 66 (Colo. 2004)) and Ohio (Floor Craft Floor Coverings, Inc. v. Parma Community Gen. Hosp. Assn., 54 Ohio St. 3d 1 (1990)).

In the Floor Craft case from Ohio, Floor Craft Floor Coverings, Inc. was the contractor and Parma Community General Hospital the owner. Braun & Spice was the architectural firm Parma hired to design the project. The Supreme Court of Ohio ruled that, "recovery for economic loss is strictly a subject for contract negotiation and assignment. Consequently, in the absence of privity of contract no cause of action exists in tort to recover economic damages against design professionals involved in drafting plans and specifications."

Privity of contract is a concept that originated in products liability law. It says that if two parties never entered into a contract with each other, then the injured party cannot sue the other party, even if the contract breach economically injures that party. The concept applies to preclude contractors and subs from suing architects with whom they have no direct contractual relationship, as was the situation in the Floor Craft case.

Lack of pri [...]

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