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Designers Don't Pay For Negligent Design -- Exceptions Are Rare

Wednesday, July 07, 2010 04:39 am


The economic loss doctrine bars claims for economic recovery between parties who do not have a contractual relationship. That scenario generally describes the contractor- designer relationship, which is why  contractors can't sue design professionals for damages due to design defects. However, the economic loss doctrine is increasingly coming under attack. Many courts have applied the concept of negligent misrepresentation to a professional whose job is to provide accurate information. Some states, such as Pennsylvania, have created statutory inroads into the doctrine. In both case and statutory law, the issue is whether there is a "duty" owed where there is no contractual duty.


While recent adjustments to limit the application of the economic loss rule are eroding the distinction between contract and tort, beware of underestimating the rule's still solid ground. A contractor seeking remedy for design difficulties will likely fare better turning to its contract than suing a party outside of it.


Contractors: Remedy for design setbacks is in the contract

The precedent in Wyoming has been set by Rissler & McMurry v. Sheridan Area Water Supply Joint Powers Bd ., 929 P.2d 1228 (Wyo. 1996). In that case, a contractor digging trenches encountered subsurface water and utility lines not shown in the plans. It also had to repair numerous water line leaks caused by ineffective, specifications-required materials. The contractor sued the project engineer for negligence and negligent misrepresentation, but the c [...]

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