ABSTRACT The Georgia Economic Loss Rule is a common law rule that inhibits claimants from seeking tort damages for losses in disputes about the functionality of products that are traditionally remedied in contract actions. The rule arises out of a desire by the courts to maintain separation between damages for breach of contract and the more expansive damages recoverable in tort. The rule provides that absent injury to person or property, other than to a malfunctioning product itself, where the loss is a pecuniary one like loss of the value or use of the product itself or the cost of repairing it, the claimant may not sue the provider for negligence. Application of the rule limits the claimant to remedies for breach of contract or warranty. The rationale is that where only the defective product is damaged due to an inherent defect an action for recompense seeks merely the benefit of the claimant's contractual bargain. Unfortunately, the application of this rule can produce harsh results when the claimant's breach of contract claims are time barred. Several exceptions to the rule have emerged that ameliorate its sometimes harsh effect. This paper will explore the rule, its rationale, and its limitations in Georgia.
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