economic torts
Economic torts, also known as business torts, are a category of torts that protect commercial and financial interests rather than personal safety or physical property. Unlike traditional torts, which compensate for personal injury or physical damage, economic torts typically involve pure economic loss, such as loss of profits, business opportunities, or market advantage.
Common examples of economic torts include fraudulent misrepresentation, negligent misrepresentation, interference with contractual relations, interference with prospective economic advantage, and injurious falsehood.
Economic torts involve pure economic loss, but not all economic loss is recoverable in tort. Courts distinguish between economic torts and situations where a party suffers financial loss because a product fails or damages only itself. For example, in the case East River S.S. Corp v. Transamerica Delaval, Inc., 476 U.S. 858 (1986), the Supreme Court held that when a defective product causes only financial loss, the claim must be brought under contract or warranty law, rather than tort law.
[Last reviewed in November of 2025 by the Wex Definitions Team]
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