Supreme Court of Texas: The Economic Loss Rule bars general contractor’s negligence and negligent misrepresentation claims against design professionals.
It is not uncommon for an owner to hire architects and engineers to design the owner’s project. The owner then seeks bids from multiple general contractors and contracts with the general contractor to build the project. No contract exists between the architect and the general contractor so they are referred to as “contractual strangers.”
Can then a general contractor recover damages against the design professional in negligence if, after construction commences, many costly errors are discovered in the engineer’s work? On June 20, 2014, Texas Supreme Court answered in LAN/STV vs. Martin K. Eby Construction Company, Inc., that they could not.