What is the test for the economic loss rule in the context of negligent breach of contract?

California, United States of America


The following excerpt is from Robinson Helicopter Co., Inc. v. Dana Corp., 102 P.3d 268, 22 Cal.Rptr.3d 352, 34 Cal.4th 979 (Cal. 2004):

We have extended the economic loss rule to claims for negligent breach of contract. (Aas v. Superior Court, supra, 24 Cal.4th at pp. 642-643, 101 Cal.Rptr.2d 718, 12 P.3d 1125.) In Aas, we explained that the rule preserves "the fundamental difference between, on the one hand, the consumers contractual interest in having a product of the expected, bargained-for value and quality, and, on the other hand, the consumers tort interest in not suffering property damage or personal injury due to negligence in the manufacturing process." (Id. at p. 642, 101 Cal.Rptr.2d 718, 12 P.3d 1125.) Thus, while we recognized "conduct amounting to a breach of conduct becomes tortious when it also violates a duty independent of the contract arising from principles of tort law" (id. at p. 643, 101 Cal.Rptr.2d 718, 12 P.3d 1125, citing Erlich, supra, 21 Cal.4th at p. 551, 87 Cal.Rptr.2d 886, 981 P.2d 978), we held that recourse for violation of that duty is "limited by the rule in Seely, supra, 63 Cal.2d 9, 18, 45 Cal.Rptr. 17, 403 P.2d 145, which bars recovery of economic damages

[22 Cal.Rptr.3d 366]

representing the lost benefit of a bargain" (Aas v. Superior Court, at p. 643, 101 Cal.Rptr.2d 718, 12 P.3d 1125).

[22 Cal.Rptr.3d 366]

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