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Contract law

The English case Hadley v. Baxendale (1854), which was adopted in the United States, split contract and tort damages by foreseeability of the damages when the contract was made. In the United States, the pure economic loss rule was adopted to further prevent negligence lawsuits in breach of contract cases. This "economic loss rule" was adopted by the Supreme Court of the United States East River Steamship Corp V Transamerica Delaval Inc. (1986) and expanded across the country in a non-uniform manner, leading to confusion. Among other examples, the tort of insurance bad faith arises out of a contractual relationship, and "collateral torts" such as wrongful dismissal involving possible overlap with labour law contracts.