The Economic Loss Rule and Private Ordering

This Article provides some perspective on the economic loss rule, the proper statement of which has figured prominently in debates about the proposed Restatement (Third) of Torts: Economic Torts and Related Wrongs. The Article describes the varieties of the economic loss rule and summarizes the history of liability for third-party economic loss. It describes the conceptual underpinnings of the rule, its application in third-party cases, and its treatment in the proposed Restatement. The Article criticizes the private ordering claim underlying the rule, particularly in light of recent changes in contract law. The Article concludes with a warning about the historical significance of the adoption of elements of the rule in the Restatement.