## Facts

- Moorman Manufacturing Company bought a bolted-steel grain-storage tank from National Tank Company in 1966 for a feed-processing plant in Illinois.
- In late 1976 or early 1977, a crack developed in a steel plate on the tank’s second ring.
- Moorman alleged design and manufacturing defects and sought the costs to repair and reinforce the tank and damages for loss of use (lost profits/income).
- Moorman alleged no personal injury and no damage to property other than the tank.
- Moorman pleaded: (1) strict liability, (2) misrepresentation, (3) negligence, and (4) breach of express warranty.

## Issues

1. Whether a purchaser may recover purely economic loss in tort (strict liability, negligence, or innocent misrepresentation) when a defective product causes no personal injury and no damage to property other than the product itself.
2. Whether the express-warranty claim was barred by the four-year statute of limitations in UCC § 2-725.

## Decision

- The Supreme Court of Illinois reversed the appellate court and reinstated dismissal of the tort counts.
- The court held Moorman’s claimed damages were “economic loss” (repair/replacement costs and lost profits) and were not recoverable in tort absent personal injury or damage to other property.
- The court held the express-warranty claim was time-barred under UCC § 2-725 because the limitations period ran from tender of delivery and suit was filed more than four years after the 1966 sale.
- Judgment left Moorman without recovery on any count.

## Legal Principles

- “Economic loss” includes inadequate value, costs of repair and replacement of the defective product, and consequential loss of profits, when unaccompanied by personal injury or damage to other property.
- Tort theories (strict liability and negligence) generally address physical harm (personal injury or property damage), not commercial loss from disappointed product expectations.
- Allowing tort recovery for purely economic loss would displace the UCC’s risk-allocation and warranty framework for commercial transactions.
- Innocent misrepresentation does not support recovery of purely economic loss in this product-defect setting.
- UCC § 2-725 imposes a four-year limitations period for breach of warranty that ordinarily accrues upon tender of delivery, not upon discovery of the defect.
- Recognized exceptions (not satisfied here) include recovery tied to sudden and dangerous occurrences causing personal injury or other-property damage, intentional misrepresentation, and negligent misrepresentation by information suppliers for others’ business guidance.

## Conclusion

The court held that a buyer cannot use tort law to recover purely economic losses caused by a defective product that harms only itself, and it enforced the UCC’s four-year warranty limitations period by barring the belated express-warranty claim.


Moorman Mfg. Co. v. Nat'l Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443 (Ill. 1982)