CODING: Words stricken are deletions; words underlined are additions.
HOUSE AMENDMENT
hbd-06 Bill No. HB 775
Amendment No. (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 Representative(s) Lacasa offered the following:
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13 Amendment (with title amendment)
14 On page 4, line 19, of the bill
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17 Section 1. (1) DEFINITIONS.--For purposes of this
18 act:
19 (a) "Economic loss" means damages for inadequate
20 value, costs of repair and replacement of a defective product,
21 or consequent loss of profits, without any claim of personal
22 injury or damage to other property, and includes the
23 diminution in the value of a product that is inferior in
24 quality and does not work for the general purposes for which
25 the product was manufactured and sold.
26 (b) "Fraud in the inducement" means activity occurring
27 prior to entering into a contract in which a party is
28 precluded from being able to freely negotiate.
29 (c) "Other property" means property outside the scope
30 of a contract.
31 (2) ECONOMIC LOSS RULE.--Parties to a contract cannot
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File original & 9 copies 03/08/99
hbd0002 02:28 pm 00775-0117-881211
HOUSE AMENDMENT
hbd-06 Bill No. HB 775
Amendment No. (for drafter's use only)
1 recover tort damages for solely economic losses in the absence
2 of personal injury or damage to other property. Parties to a
3 contract are limited to contract remedies.
4 (3) LIMITATIONS.--The economic loss rule operates as a
5 bar to tort recovery only if the parties are in privity. No
6 suit shall lie in tort for negligence if damages are solely
7 economic. The economic loss rule bars causes of action based
8 solely on fraud related to a contract. A construction
9 contractor is barred from bringing any tort claim for a
10 situation in which the contractor suffers solely economic
11 loss, regardless of whether the contractor is in privity of
12 contract. The contractor's only remedy is under the contract
13 and warranty.
14 (4) EXCEPTIONS.--A party may sue to recover economic
15 damages in tort as long as such damages are a direct result
16 of, and connected to, bodily harm or injury to other property.
17 A party may sue in tort if the economic loss is connected with
18 a contract but the intentional negligent act occurs
19 independent from the contract breach. An action based upon
20 fraud in the inducement is not barred by the economic loss
21 rule. Fraud in the inducement creates an independent cause of
22 action in tort. However, if the fraud arises from the
23 performance of the contract, the only cause of action is under
24 the contract or warranty.
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27 ================ T I T L E A M E N D M E N T ===============
28 And the title is amended as follows:
29 On page 1, line 2, after the semicolon
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31 insert:
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File original & 9 copies 03/08/99
hbd0002 02:28 pm 00775-0117-881211
HOUSE AMENDMENT
hbd-06 Bill No. HB 775
Amendment No. (for drafter's use only)
1 providing definitions; prohibiting recovery of
2 tort damages for solely economic losses;
3 providing limitations; providing exceptions;
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File original & 9 copies 03/08/99
hbd0002 02:28 pm 00775-0117-881211