Compensation Of Pure Economic Loss And Control

Pure economic loss, arising out of the interdependence of interests of different subjects, is a financial or pecuniary loss which is not causally consequent upon physical injury to the victim's own person or property. Therefore it shows frequently that the expected economic interests of the victim are infringed. In modern society, the compensation of pure economic loss becomes a important problem in law, as it happens frequently and has strong ripple reaction. In particular, the compensation is much more complex, when pure economic loss takes place in non-contractual relationships, as many problems are concerned, such as checking and balancing different benefits, indeterminate liability, the division between tort law and contract law, and the contradiction between the protection of private freedom and economic interests and so on. Accordingly, pure economic loss becomes a heated topic in comparative law, although it doesn't attract much attention in China. In this article, an analysis of the basic essence of pure economic loss will be conducted. For the further comprehensions, I compare pure economic loss with other types of losses. At the same time, in order to deepen the realization of pure economic loss in the view of law, to classify pure economic loss on the basis of the experience and enlightment from comparative law. Then it will make clear, which elements determine the compensation behind the losses during the definition und classification of pure economic loss. These elements together with legal principles behind the concept and logic of pure economic loss can be used as a foundation for legal judgment, in order for realizing a systematic control of liability for compensation.On basis of that, an observation of pure economic loss is underdone, in order to find out how it is compensated and controlled in our legal system, which finally leads to solve practical problems in our society.Except for the introduction and the conclusion, the article contains five sections.Section 1 Basic theories on pure economic lossIn this section, an analysis and an investigation of the substance, characteristics of pure economic loss will be conducted. This investigation leads to a further study on all kinds of hindrances during compensation. Through that, the necessity and the rationality of compensation will be explained and a necessary reasonable control of the compensation will be proved. After that, the meaning and results of classification of pure economic loss will be introduced, in order to give a vivid picture of pure economic loss. Further I would like to analyze the relationship characteristics behind. On basis of that, connecting with the division between contract responsibility and tort responsibility, I try to have a better understanding of the pure economic loss in view of the relationships between parties.Section 2 Comparative study on realizing and controlling the compensation in tort lawIn this section, how to realize and control compensation of pure economic loss in non-contractual relationship will be underdone in the frame of tort law. Here British, America, Germany and France will be selected as observing objects. I attempt to find out the systematic changes of compensation of pure economic loss and the concrete legal mechanism on how to realize and control compensation of pure economic loss in different counties. The rationality and validity of these mechanisms will be further studied. In the end, a real picture of compensation system and legal policies in these countries will be revealed.Section 3 Comparative study on realizing and controlling the contractual compensationIn this section, I would like to make an investigation into how to realize the contractual compensation of pure economic loss in non-contractual relationship, that is to say, an investigation, how the contractual effect in above-mentioned countries expands, is conducted, in order to give relief for these non-contractual parties. It aims to find out the controlling mechanism and rationality in the process of the expanding, therefore to reveal the relational essence of pure economic loss and the real meaning of compensation, which is determined by relational essence.At the same time, this section is closely related to the second section, as the compensation-realizing of pure economic loss in fact relies on the relief space of legal system in different countries. A connection and an interaction between tort responsibility and contract responsibility show out during realizing pure economic loss.Section 4 Study on classification in view of relationship and analysis of compensation controlIn this section, on basis of investigation and study in view of comparative law, a looking back to the existing classification is carried out. Pure economic loss will be classified with a standard of compactness between parties, whose purpose is to solve the compensation problem concerning pure economic loss. Accordingly, a series of types are obtained as follows: pure economic loss in contractual relationship, pure economic loss in chain contracts, pure economic loss in near-contractual relationship, pure economic in the case of indirect infringement, fortuituos pure economic. The degree of series is from strong to weak.Section 5 Compensation of pure economic loss in our legal system and its control-realizingThis section begins with the existing status of pure economic loss in our legal system. Then a conclusion, that the pure economic loss in our land should be compensated and reasonable controlled in a systematic way, is reached. In this respect, a conclusion should be draw that tort responsibility is a more reasonable way of compensation after the investigation into rationalizing the ways of compensation in our country. Certainly it doesn't mean a complete denying of contract liability. Based on that, it will be proved, that the standard or the rationality of realizing-control is dependent on the constitution of tort liability, so that a reasonable remedy and control of pure economic loss, which is caused indelicately, is brought out in our legal system. In the end of this section a few typical cases in legal practice will be analyzed and investigated in view of relationship-type.