Economic Loss in American Tort Law: The Examples of J'Aire and of Products Liability

This Article examines the issues surrounding the application of tort doctrine to problems of economic loss. The author examines the holdings in J'Aire Corp. v. Gregory, a California decision that established a general economic loss tort, and Seely v. White Motor Corp., another California decision that refused to extend tort coverage to economic losses resulting from defective products. The author discusses the application of products liability doctrine to cases of economic loss, and argues that traditional tort law needs to account for other legal doctrines, such as the common law of contracts. In conclusion, the author endorses the rule of non-tort recovery suggested by the court in Seely.