Abstract

As generally understood in the law and economics literature, the rule states that a plaintiff cannot recover damages for a pure financial loss. The comparative study of the recoverability in tort of pure losses, however, reveals that the recognition and significance attributed to the rule and to the notion of economic loss varies considerably across Western legal systems. This paper therefore revisits recent findings of comparative law about the recoverability of pure losses, and demonstrates that legal notions of pure encompass several types of situations, with little or no correspondence with the relevant taxonomy. In terms of analysis, several situations of are easily distinguishable and have very different significance for social welfare analysis. What appears to be erratic judicial applications of a single rule are in fact justifiable and often valid applications of different underlying principles. From an perspective, it may in fact be necessary to have more than one category for the treatment of loss, given the inability for a single legal instrument to address the variety of cases that may fall within such an iconoclastic rule.

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