Legal Definitions - other-property rule

The other-property rule is a legal principle that helps determine when a person can sue for damages caused by a defective product. Specifically, this rule states that if a product defect causes damage only to the product itself, a lawsuit based on tort law (which deals with civil wrongs and injuries) is generally not permitted to recover those damages. Instead, claims for damage confined solely to the product itself are typically handled under contract law, often through warranties or sales agreements.

The purpose of this rule is to distinguish between situations where a product defect causes a sudden, hazardous event leading to damage to other property or personal injury (which falls under tort law), and situations where a product simply fails to perform as expected, causing only economic loss related to the product itself (which falls under contract law).

Here are some examples to illustrate the other-property rule:

• Example 1: Defective Vehicle Engine

  Imagine a person buys a brand-new car, and after a few months, a manufacturing defect in the engine causes it to seize up and become completely inoperable. The engine failure does not cause a fire, an accident, damage to the car's body, interior, or any other property, nor does it cause any personal injury to the driver or passengers.

  How it illustrates the rule: Under the other-property rule, the car owner would likely not be able to sue the car manufacturer in tort for the cost of repairing or replacing the engine or the car itself. Since the defect caused damage only to the product (the car's engine, which is part of the car), the owner's recourse would typically be through the car's warranty or other contractual agreements with the dealership or manufacturer.

• Example 2: Malfunctioning Home Appliance

  A homeowner purchases a high-end washing machine. Due to a hidden manufacturing flaw in its control panel, the machine eventually stops working entirely after a year. This malfunction occurs without leaking water, causing an electrical short, damaging the laundry room floor, or harming any clothing inside.

  How it illustrates the rule: In this scenario, the other-property rule would prevent the homeowner from pursuing a tort claim against the washing machine manufacturer for the cost of the broken appliance. Because the defect only damaged the washing machine itself and no other property, the homeowner's remedy would typically be found in the product's warranty or consumer protection laws related to the sale, rather than a tort lawsuit.

• Example 3: Faulty Industrial Equipment

  A construction company invests in a specialized piece of heavy machinery, such as a large excavator. A defect in the excavator's hydraulic system causes the main digging arm to fail and become permanently unusable. This failure occurs while the machine is idle, without causing the arm to collapse, strike other equipment, damage the construction site, or injure any workers.

  How it illustrates the rule: Here, the other-property rule would apply because the defect in the hydraulic system only damaged the excavator itself. The construction company would generally need to rely on its purchase agreement, warranty, or other contractual terms with the excavator manufacturer to seek compensation for the failed equipment, rather than filing a tort lawsuit.