The economic loss rule is a judicially created doctrine that bars plaintiffs from suing in tort for purely economic losses when the entitlement to recovery arises only from a contract. In Alejandre v. Bull, the Washington State Supreme Court acknowledged that there are exceptions to the rule but explicitly declined to say whether it would recognize an exception for fraud. Washington’s appellate courts answered Alejandre’s open question, holding that the economic loss rule barred all fraud claims except for the narrow tort of fraudulent concealment. The appellate courts interpreted Alejandre broadly to apply the economic loss rule whenever the parties had a contractual relationship and the losses were purely economic. The Washington State Supreme Court responded to these appellate decisions in Eastwood v. Horse Harbor Foundation. In Eastwood, the Court explicitly rejected the appellate courts’ broad view of Alejandre and held that the economic loss rule does not bar a plaintiff from bringing a tort claim where the tort duty is independent of the contract. This Comment argues that, in light of Eastwood, Washington’s economic loss rule should not bar fraud claims because the duty not to commit fraud is independent of any contract.
Notes and Comments,
Eastwood's Answer to Alejandre's Open Question: The Economic Loss Rule Should Not Bar Fraud Claims,
86 Wash. L. Rev.
Available at: https://digitalcommons.law.uw.edu/wlr/vol86/iss2/4