The Economic Loss Rule is a clear protection to potential third-party liability to a contractor for claims of lost earnings and lost profits. However, and with most rules, there are exceptions. The prudent contractor is well advised to understand the rule and the exception.

Ronald H. Mandel is an attorney with the business litigation firm Gray·Duffy, LLP, a California-based business litigation law firm. His practice focuses on representing contractors in construction defect-related claims. He can be reached at ">RMandel@GrayDuffyLaw.com or (818) 907-4000.