Section 11.15 Definition

• Library: Construction Law 2016 Supp

1. (§11.15) Definition

Though divided, some states have adopted the economic loss doctrine. This provides that claims against design professionals must be resolved through contract and not negligence when the damages sought are economic losses. The definition of economic losses is expressed in 2314 Lincoln Park West Condominium Ass’n v. Mann, Gin, Ebel & Frazier, Ltd., 555 N.E.2d 346 (Ill. 1990), the Supreme Court of Illinois case that adopted the economic loss doctrine for architects in that state. The court stated:

“Economic loss” has been defined as “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits—without any claim of personal injury or damage to other property as well as “the diminution in the value of the product because it is inferior in quality and does not work for the general purpose for which it was manufactured and sold.” These definitions are consistent with the policy of warranty law to protect expectations of suitability and quality.

Id. at 348 (quoting Moorman Mfg. Co. v. Nat’l Tank Co., 435 N.E.2d 443 (Ill. 1982)) (citations omitted). The court concluded that the economic loss doctrine barred the plaintiff’s negligence action against an architect—the action sought damages for the cost of making certain repairs to a building in which the association members’ condominium units were located. Id. at 353. The plaintiff in the case was the condominium association, and not the party that contracted with the architect. Id...