Emergence of Third Party Liability Issues
Third party claims follow a common pattern. Two parties have a contract. The
breach or negligent performance of one of the contracting parties injures the
economic interests of a third party. The third party sues the negligently-performing
party, either in tort or as a third party beneficiary. Consider the following:
- Purchasers of condominium units sue the developer’s lawyer
who prepared the public offering statement for failing to properly
disclose negative information.
- Following the failure of a business, disappointed investors
and lenders pursue the lawyers who issued the opinion, the accountants
who performed the audits, and others who were involved in the
deal gone sour.
- A subcontractor who is delayed in its performance on a construction
project sues the owner’s architect for negligently drawing
the plans and supervising the construction.
- The successor in title to a landowner sues a surveyor or title
abstracter whose errors in performing its contract with the original
landowner caused the successor’s interest to be less valuable
than it expected when it purchased the land.
- The purchaser of a jet airplane sues the company that had serviced
the plane for a previous owner for failing to keep proper maintenance
logs.
Because third party liability issues arise from a wide range of
fact situations, until very recently they have seldom been seen
as part of a distinct field of law. Today that field, sometimes
known as “economic negligence,” brings together all
of the instances of third party economic loss.
More information about the book Professional Liability to
Third Parties, Second Edition |
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