The Economic Loss Rule Continues To Expand – Make Sure Your Contract Addresses Tort Risks

In 2000, the Colorado Supreme Court adopted the “economic loss rule” in Colorado. The rule “provides that a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.” Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000). Since the AZCO case, Colorado courts have applied the rule...
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Using Contractual Valuation Mechanisms To Reduce Risk

Companies frequently have to determine the value of interests, such as tangible property, stock or other corporate ownership interests, intellectual property, or the overall value of a business. In some instances, these determinations occur in the context of lawsuits. Recognizing the cost, uncertainty, and volatility associated with using lawsuits to resolve valuation disputes, sophisticated parties sometimes negotiate in advance, and incorporate into their agreements, Contractual Valuation Mechanisms. Some of these mechanisms, such as using independent...
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Contract Provisions Regarding Recovery of Attorneys’ Fees Are Critical

A recent case from the Colorado Supreme Court-Planning Partners Int’l, LLC v. QED, Inc., No. 11SC961, 2013 CO 43 (Colo. July 1, 2013)-highlights the importance of contractual provisions providing for the recovery of attorneys’ fees, and the language used in those provisions. As many business owners and executives know, Colorado law, like that in most states, generally provides that each party to a commercial lawsuit pays its own legal fees, win or lose. A significant...
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