463 - exam i - review deck 2

negligent misrepresentation

a civil legal claim that happens when someone carelessly makes a false statement of a material fact, leading another person to rely on it and suffer financial harm

economic loss doctrine

• a legal rule that stops a person from suing in tort when their only damage is a financial loss without any personal injury or damage to other property

• no suing for PURELY ECONOMIC LOSS

someone may not recover economic loss when…

1. loss comes from bodily harm to someone else

2. loss comes from damage to property (that the plaintiff doesn’t own)

3. loss comes from relying on negligent misrepresentation that wasn’t made directly to the plaintiff

why is economic injuries treated differently than physical injuries

economic loss is endless / multiplies after the event

what is the main point of economic loss doctrine?

to seperate between tort law and contract law

what is the exception to the economic loss doctrine?

professional malpractice

pure comparative negligence

whatever the % you are not responsible for, is what you recover

modified comparative negligence

plaintiff can recover as long as they aren’t more than 50% at fault

the economic loss doctrine is typ. a ___ law issue

state

Which rationale supports the Economic Loss Doctrine?

It ensures that economic risks resulting from a breach of contract are allocated by contract rather than through tort law.

What is the primary purpose of the Economic Loss Doctrine (ELD)?

To prevent recovery in tort for purely economic losses without an injury to a person or property.

What type of damages are recoverable in a tort claim but not in a contract claim?

Punitive damages

In the example where a subcontractor paints the wrong color, why can't the owner sue the subcontractor directly?

The owner is not in privity of contract with the subcontractor

Which of the following scenarios would the ELD most likely apply to if the injured party brought a tort claim?

A contractor’s failure to deliver a project on time, causing financial losses for the owner.

What was the primary issue in the LAN/STV v. Martin K. Eby Construction Co., Inc. case?

Whether the Economic Loss Doctrine allowed the contractor to recover damages in tort from the architect.

why was eby’s lawsuit against dart dismissed?

eby had not exhuasted its contractually required administrative remedies

How does the economic loss doctrine impact construction disputes in Texas?

It limits lawsuits for economic damages to parties with direct contractual relationships

Contractual privity is an important concept in understanding the impacts of the Economic Loss Doctrine (rule).  What does "privity of contract" mean?

A legal agreement between two parties

Understanding the economic loss rule, if a dispute arises on a construction project in Texas, which parties can typically sue each other directly?

Only parties with a direct contractual relationship

How does the ELD impact recovery for economic losses in a contractual relationship?

It requires parties to rely on contract remedies instead of tort claims.

all contracts are ______, but not all _______ are contracts

agreements

what are the 3 steps necessary for a legally binding contract

1. offer

2. accpetance

3. consideration

promissory estoppel

a legal principle that allows a court to enforce a promise and award damages even if there is no formal, written contract or official consideration

patent ambiguity

• an obvious uncertainty, contradiction, or unclear language that appears directly on the face of a legal document, contract, or will

• at the FACE

latent ambiguity

• a hidden or concealed uncertainty in a legal document that is clear on its face, but becomes unclear when applied to real-world facts

• HIDDEN / CONFUSION

statute of frauds

a legal rule requiring specific types of contracts to be in writing and signed to be enforceable in court

explain the contracts covered in the statute of frauds

MY LEGS

• M: Marriage (prenuptials)

• Y: Year (agreements taking more than one year to perform)

• L: Land (contracts for the sale of land or any interest in land)

• E: Executor (a promise by an executor to personally pay estate debts from their own funds)

• G: Guarantee (a promise to answer for the debt or obligation of another)

• S: Sale of Goods (contracts for the sale of goods priced at $500+)

what are the 4 steps of breach of contract

1. valid contract exists (o,a,c)

2. the plaintiff performed

3. the defendant breached

4. plaintiff secured damages

explain the 1st element of a breach of contract - valid contract

You must show a legally enforceable contract existed.

explain the 2nd element of a breach of contract - plaintiff performance

You must show the plaintiff performed their obligations or had a valid excuse for not performing.

explain the 3rd element of a breach of contract - defendant breach

Show the defendant failed to perform a contractual duty.

explain the 4th element of a breach of contract - damages

you must show the breach caused harm.

quasi-contracts

a court-imposed legal obligation created to prevent one party from experiencing unjust enrichment at the expense of another when no formal agreement exists

promissory estoppel

a legal principle that allows a court to enforce a promise and award damages even if there is no formal, written contract or official consideration