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FROM THE BENCH: Further Weakening of ELD

from Constructlaw

The economic-loss doctrine (ELD) holds that service providers cannot be sued for negligence when the loss is purely economic, to prevent tort law from trumping contract law, given that — via contract law — all economic issues should be considered in the agreement mutually achieved. As such, where the ELD is maintained, no one may sue geoprofessionals for professional negligence (a tort) when losses are purely economic. The only basis for suit would be breach of contract, limiting claims to clients (who would bear the risk of being sued by constructors who seek to recover purely economic losses arising out of errors in geoprofessionals' instruments of professional service). The ELD was seriously eroded when, in the case of Bilt-Rite Contractors, Inc. v. Architectural Studio, the Pennsylvania Supreme Court ruled that a design professional could be liable for negligent misrepresentation (also a tort) by providing negligently prepared information (e.g., reports, plans, or specifications) it knows others (like constructors) will rely on. Now, in Gongloff Contracting, L.L.C. v. L. Robert Kimball & Assocs., Architects and Engineers, Inc., Pennsylvania has reinforced and expanded its prior ruling. As such, the ELD exists in name only, making it particularly important to consider who the constructors will be when developing a go/no-go response to an RFP. more

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