## Facts

- Jack Rardin, operating an Illinois printing business, purchased a used printing press from Whitacre-Sunbelt, Inc. for $47,700.
- The purchase price included $1,200 to cover dismantling and loading the press for shipment from Whitacre’s Georgia premises.
- The sales agreement stated the press was sold “as is, where is,” and allocated responsibility for physical damage to Whitacre when caused by the fault or negligence of Whitacre’s employees, agents, contractors, or representatives.
- Whitacre hired T & D Machine Handling, Inc. as an independent contractor to dismantle and load the press.
- T & D allegedly performed the work negligently, damaging the press and delaying installation and operation in Rardin’s business.
- Rardin settled with Whitacre for the repair costs attributable to the physical damage to the press.
- Rardin then pursued only T & D, seeking lost profits from business downtime caused by the delay.

## Issues

1. Whether Illinois law permits a buyer to recover purely economic consequential damages (lost profits from delay) in tort from a seller’s negligent independent contractor, where the buyer’s contract with the seller allocated risk for physical damage and that claim has been settled.

## Decision

- The Seventh Circuit affirmed the dismissal for failure to state a claim.
- The court held that, under Illinois law, Rardin could not recover lost profits in tort from T & D because the claimed loss was purely economic and tied to a commercial transaction governed by contract-based risk allocation.

## Legal Principles

- Under Illinois’s economic loss rule, purely economic losses (including lost profits from inability to use commercial equipment) generally are not recoverable in tort when the dispute arises from a commercial setting in which contract law allocates the relevant risks.
- Tort law may provide remedies for personal injury or property damage, but does not ordinarily impose a duty to protect another’s business expectations from purely economic harm, especially where extending liability would circumvent contractual limits on consequential damages.
- A plaintiff may not obtain, through tort claims against a non-contracting contractor, consequential economic damages that contract law would typically restrict or channel through the contractual relationship governing the transaction.

## Conclusion

Because Rardin sought only consequential economic loss (lost profits from delay) after settling the physical-damage claim addressed by the sales contract’s risk allocation, Illinois law provided no tort remedy against the seller’s independent contractor, and dismissal was properly affirmed.


Rardin v. T & D Mach. Handling, Inc., 890 F.2d 24 (7th Cir. 1989)