Breach of Contract and Tort Claims: The Economic Loss Rule Explained

Author: Lindsay A. Compton

Date: February 16, 2026 

Breach of Contract and Tort Claims: The Economic Loss Rule Explained
Clients often ask whether they can bring a negligence claim when a contract goes wrong. The short answer is: not always. I know, I know, such a lawyer answer, but let me explain. Florida law draws a clear line between contract disputes and tort claims, and that line is enforced through what is known as the economic loss rule.

Understanding this rule can prevent wasted litigation and help set realistic expectations before a lawsuit is filed.


What Is the Economic Loss Rule?
The economic loss rule prevents parties from turning a breach of contract into a tort claim when:

• The same facts support both claims, and

• The damages sought are identical.

Florida courts have consistently held that where the alleged wrongdoing arises solely from contractual duties, the remedy lies in contract, not tort. When the facts underlying a negligence claim are the same as those supporting a breach of contract claim, and the damages are the same, the tort claim fails as a matter of law.

Contract Duties vs. Independent Tort Conduct
To pursue a tort claim alongside a breach of contract claim, a plaintiff must allege more than poor performance of a contract. To survive dismissal, the complaint must allege:

• Conduct that is independent of the contractual duties, and

• Damages that are separate and distinct from those flowing from the alleged breach of contract.

Simply labeling a claim as “negligence” is not enough. Courts look at the substance of the allegations, not the title of the claim. A common example is when a plaintiff asserts a negligence claim based on the same conduct that allegedly breached the contract. If the complaint 1. relies on the same facts for both claims; 2. alleges no conduct outside the contract; and 3. seeks the same damages under both theories,the negligence claim will be dismissed as a matter of law. Without allegations of an independent tort, courts will not allow a contract dispute to be reframed as a tort action.


The Economic Loss Rule in Contractor Disputes
A common scenario where the economic loss rule comes into play in Florida is in contractor disputes. In contractor disputes, Florida law generally prevents a party from turning a breach of a construction contract into a negligence claim when:

•  The same facts support both claims; and

• The damages sought are purely financial and the same under each theory.

If the contractor’s alleged wrongdoing is simply a failure to perform the work as promised in the contract, the remedy is usually contractual, not tort-based.


When Negligence Claims Against Contractors Are Barred
A negligence claim will likely fail if it is based on:

• The same conduct that allegedly breached the construction contract; and

• The same damages, such as the cost to repair defective work or complete the project.

For example, alleging that a contractor “negligently” failed to complete work on time or failed to meet contract specifications, without more, does not create an independent negligence claim. Courts will dismiss these claims as a matter of law when they arise from the same facts as the breach of contract claim.


What Is an Independent Tort in a Construction Case?
To pursue a negligence claim against a contractor in addition to a breach of contract claim, a plaintiff must allege facts showing:

• Conduct independent of the contract; and

• Damages separate and distinct from contract damages.

In the construction context, this may include conduct that violates a legal duty that exists outside the contract, such as causing damage to other property or engaging in conduct that goes beyond mere poor workmanship.

Without allegations of independent tortious conduct, a negligence claim cannot survive.


Why Courts Enforce This Rule
The economic loss rule exists to preserve the distinction between contract law and tort law. Contracts allocate risk, define duties, and limit remedies. Allowing tort claims based on the same conduct would undermine the certainty and predictability contracts are meant to provide.

In short, contract law governs disappointed economic expectations. Tort law addresses violations of duties imposed by law, not by agreement.


Call to Action
If you are considering filing a lawsuit, or defending a lawsuit with a breach of contract claim and a negligence claim, it is critical to understand the facts being alleged and the damages being sought so as to assess whether the claims in contract and tort can both be sustained. Mischaracterizing a contract dispute as a negligence claim can result in early dismissal and unnecessary legal expenses.

Contact Compton Law, P.A. at (239) 268-4114 or scheduled a consultation using the link below to evaluate your claims, identify viable causes of action, and develop a litigation strategy grounded in Florida law.