Defective Structures and Economic Loss in the United States: Law and Policy
Bibliographic record
Abstract
This article surveys the recent development of contractor liability for defective construction. The loss rule that precludes damages for economic losses from defective construction remains relatively firm in the U.S. for commercial construction, but has eroded in some jurisdictions for home construction. A variety of judicial and legislative approaches have caused this erosion, which allows recovery in tort rather than in contract in most cases, and can extend liability to owners other than the first buyer. Some courts have simply imposed a common law duty of care on home builders, while others have legislated such liability, while still others have not deviated from the economic loss rule. The variety of approaches mirrors that in England, Australia, Canada and New Zealand. The effects of imposing liability for economic loss in these cases is reflected in higher liability premiums and reduced coverage for contractors' insurance in this market, which has made conventional liability insurance unaffordable by some smaller homebuilders, who are required either to form or participate in a captive insurance company to obtain affordable coverage. Insurers are working with the building industry to reduce risks, evidence that liability rules do affect levels of care taken. Finally, the article examines the policy concerns that might underlie a distinction in liability rules for commercial and home construction, noting the greater ability of commercial buyers to obtain contractual protections due to awareness of the risk, a distinction not made in judicial opinions.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.003 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.002 | 0.002 |
| Science and technology studies | 0.004 | 0.007 |
| Scholarly communication | 0.008 | 0.004 |
| Open science | 0.001 | 0.003 |
| Research integrity | 0.006 | 0.004 |
| Insufficient payload (model declined to judge) | 0.012 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".