Economic Loss Doctrine: California vs. New York

California follows a modified version of the Economic Loss Doctrine which allows recovery for purely economic losses only in the context of products liability cases when a warranty has been breached. In tort cases, California courts generally restrict recovery for economic losses to contractual relationships, adhering to the principle that tort law is designed to address personal injuries and property damage. This principle was notably emphasized in 'Aas v. Superior Court', where the California Supreme Court held that homeowners could not recover economic damages from a contractor based solely on negligence.

New York's approach to the Economic Loss Doctrine is similar but with distinct nuances. In New York, recovery for purely economic loss in negligence claims is generally barred unless there is a special relationship akin to a contractual relationship between the parties. The landmark case 'Breach of Fiduciary Duty' informed the understanding that one can recover purely economic losses if proximity can be demonstrated. Overall, New York courts have also prioritized contractual remedies in cases where the parties are in a contractual relationship, reinforcing the separateness of tort and contract law in terms of permissible claims.