LAW FOR BUSINESS Essay Example | Topics and Well Written Essays - 1250 words

LAW FOR BUSINESS - Essay Example An example is if you negligently cause someone to break his or her leg and can't work for two weeks, the economic loss he/she suffers as a result of being unable to work as usual is consequential economic loss. Similarly, if someone negligently breaks your car, and he or she needs the car to go to work and it takes him or her two weeks to get a replacement car, the economic loss he or she suffers is consequently economic loss. According to www.gillhams.com, (2010) The importance of determining the differences that exist between pure economic loss and other forms of loss that are consequential to injury to the person, physical loss or to the property is that the pure economic loss is usually not recoverable in law as damages or otherwise. Pure economic loss can commonly be categorized as loss of some other form of pecuniary gain, wasted expenditure, profitability or loss of profit. When pure economic loss is negligently caused to a party to a contractual right or contract are made les s valuable by the acts or omissions of a defendant, both instances that is where the terms of the contract have not been breached or violated, cannot give rise to a good cause of action and action to be taken. There is a class arising from a certain class of torts and often referred to as economic torts that allows the recovery of economic interests by the parties involved. However, these economic torts do not allow recovery of pure economic loss, as liability stems from the root of harm to some interest that can be protected in the hands of the claimant, such as harm to a business, procuring a breach of contractual rights, or some other actionable wrong. According to V. Charlotte (2006), it is notable that for the loss to be consequential economic loss, the injury or the property damage has to be to you, not someone else. Lets say A negligently crashes his car into the car of B. B is then rendered unable to work for two weeks. This means that he gets to loses his income for two wee ks. Because B was a good employee, his employer, C, also loses income. B's economic loss is consequential. C's is pure economic loss, because the personal injury was to B, not to him. This example therefore shows the difference. The floodgates argument is the most common one. It would mean that single events could lead to any numbers of claims. It is argued that because the amounts of pure economic loss claims and the class of people claiming for pure economic loss are so uncertain and so indeterminate, it would make it very difficult and very expensive for people to insure against these claims (www.gillhams.com, 2010),. S. Anthony, (2009) Economic loss is not always is not always irrecoverable in the tort of negligence, but it requires a claimant to prove the exceptional circumstances necessary in order to establish that a defendant owed him a duty of not to cause such damage. This long standing, reluctance to recognize a duty of care to prevent an economic loss has been largely ba sed on what is referred to as Floodgates argument. The concern is that it would widen the potential scale of liability in tort to an indeterminable extent. In Murphy v Brentwood, there were two main reasons for the decision in the case. Firstly, it was considered established law that in tort the manufacturer of chattel owned no duty in respect of defects that did not cause personal injury or damage to other property. The second main