Other-Property Rule Law and Legal Definition

Other property rule is a principle which says recovery under tort law is not available if the only damage caused by a product defect is to the product itself. Tort damages generally compensate the plaintiff for loss and return him/her to the position s/he occupied before the injury. The standard was set in the case E. River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858 (U.S. 1986) where the court held that products liability claim does not lie in admiralty, when defective product malfunctions, injuring only product itself and causing purely economic loss. Damage to a product itself is most naturally understood as a warranty claim. Such damage means simply that the product has not met the customer's expectations, or, in other words, that the customer has received insufficient product value. Therefore, a claim of a nonworking product can be brought as a breach-of-warranty action or if the customer prefers, it can reject the product or revoke its acceptance and sue for breach of contract.