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Navigating the Economic Loss Rule in Construction Cases
Mike Stenglein, Paul Straus and Samantha Porphy Ade of King & Spalding write: The fact pattern is all too common. No sooner than the ink dries on a contract do the construction problems become apparent, and eventually, the owner sues for breach of contract, fraudulent inducement, and negligence. But the contractor isn’t worried – the contract’s favorable limitations on liability, a liquidated-damages clause, a merger clause, and the economic loss rule will protect him from the owner’s tort claims. Or will it?
