Document Type

Court Brief

Publication Date

1-20-2026

Abstract

In September, 2025, the Colorado Supreme Court granted certiorari in Veolia Water Tech. v. Antero Treatment to resolve the following question: “Whether the economic loss rule bars a fraud claim when the parties were in a contractual relationship, the fraud claim seeks the same relief as the plaintiff’s contract claim, and the fraud concerns the defendant’s performance under the contract.”

This scholar’s amicus brief addresses four questions under Colorado law: (1) Does an exploratory contract to determine whether a transaction is desirable prevent liability in tort for fraud in the inducement of the principal contract? (2) What is the significance of contractual discretion in applying the duty of good faith? (3) Does the economic loss rule prevent liability in tort for fraud that might also violate the duty of good faith? (4) Does the economic loss rule prevent liability in tort for fraud in the performance?

More broadly, the brief argues that in actions between contract parties, the economic loss rule should apply to claims of product liability and negligence but should not prevent recovery in tort for fraud. Actions for product liability or negligence threaten the contractual allocation of risk where the alleged wrong is also a breach. Liability in tort for a party’s fraud protects the contractual allocation of risk. This is true both of fraud in the inducement and fraud in the performance. And it is true whether or not the fraud is also a breach.

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