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All-Tech Telecom v. Amway: Difference between revisions
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|issues=Does the [https://www.americanbar.org/groups/construction_industry/publications/under_construction/2021/spring2021/economic_loss_doctrine/ Economic Loss Doctrine] (ELD) prevent a party from seeking duplicate remedies for contract claims? | |issues=Does the [https://www.americanbar.org/groups/construction_industry/publications/under_construction/2021/spring2021/economic_loss_doctrine/ Economic Loss Doctrine] (ELD) prevent a party from seeking duplicate remedies for contract claims? | ||
|holding=Yes. The [https://www.americanbar.org/groups/construction_industry/publications/under_construction/2021/spring2021/economic_loss_doctrine/ Economic-Loss Doctrine] (ELD) prevents a party from seeking duplicate remedies for contract claims. | |holding=Yes. The [https://www.americanbar.org/groups/construction_industry/publications/under_construction/2021/spring2021/economic_loss_doctrine/ Economic-Loss Doctrine] (ELD) prevents a party from seeking duplicate remedies for contract claims. | ||
This case is a purely contract claim. | |||
|reasons=[[Richard Posner]]: When there are contractual remedies, there is no need for courts to also allow parties to seek tort remedies, such as mis-representation. | |reasons=[[Richard Posner]]: When there are contractual remedies, there is no need for courts to also allow parties to seek tort remedies, such as mis-representation. | ||
|rule=A promise is about the future. A [[promissory estoppel]] applies to when a promise can't be enforced under contract law principles. | |||
A warranty is about the past. This is protected by contract law. | |||
One cannot use a tort remedy in a breach of contract claim. | |||
|case_text_links={{Infobox Case Brief/Case Text Link | |case_text_links={{Infobox Case Brief/Case Text Link | ||
|link=https://casetext.com/case/all-tech-telecom-inc-v-amway-corporation | |link=https://casetext.com/case/all-tech-telecom-inc-v-amway-corporation | ||
Latest revision as of 17:16, July 21, 2023
| All-Tech Telecom v. Amway | |
| Court | 7th Circuit |
|---|---|
| Citation | |
| Date decided | April 7, 1999 |
Facts
In 1987, Amway created TeleCharge, a new long distance phone. TeleCharge was geared toward hotel & restaurant guests.
Customers would use a credit card or calling card to make long-distance call on a TeleCharge; the charges were divided between the (1) hotel or restaurant, (2) the phone distributor, & (3) the phone company.
Away hyped up TeleCharge as the best phone system in the country.
In 1988, All-Tech was created to distribute the TeleCharge phone. Amway told distributors that each TeleCharge phone could generate $750 in profits.
Over the next few years, there were numerous problems with TeleCharge phones such as regulatory hurdles.
By 1992, the TeleCharge phones had become obsolete.Procedural History
All-Tech Telecom, Inc. ("All-Tech") sued Amway for breach of warranty, intentional & negligent mis-representation, and promissory estoppel.
Amway won summary judgment on the claims of misrepresentation & promissory estoppel.
The jury found a breach of warranty; however, All-Tech wasn't awarded any money damages.Issues
Holding
Yes. The Economic-Loss Doctrine (ELD) prevents a party from seeking duplicate remedies for contract claims.
This case is a purely contract claim.Reasons
Rule
A promise is about the future. A promissory estoppel applies to when a promise can't be enforced under contract law principles.
A warranty is about the past. This is protected by contract law.
