What is the “economic loss” rule in defective products law?

The economic loss rule in defective products law in New York relates to a claim for damages or injury caused by a product. This rule states that an individual is not permitted to recover damages just for the lost value of a defective product that they purchased. In other words, consumers cannot sue the manufacturer for the money they paid for the product, only for the harm or injury caused by the product. For example, let’s say a customer purchases a lawnmower and it malfunctions, causing them to lose their job. According to the economic loss rule, the customer may sue the manufacturer for the lost wages, but not for the purchase price of the lawnmower. This is because the customer is not eligible to recover the amount they paid for the product, but can only seek damages for the harm the defective product caused. The economic loss rule does not cover all claims, however. There are some exceptions, such as the damages for negligence or breach of warranty, that are still allowed. Additionally, a claim can still be made for physical injury or damage to property that is caused by a defective product. Ultimately, the economic loss rule in New York prevents individual consumers from suing product manufacturers for the cost of the product they purchased. Instead, the consumer is allowed to seek damages for the harm or injury that the defective product caused.

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What is the “economic loss” rule in defective products law?

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