## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 10

- 3762 S CH REIBER F OODS, I NC ., Plai nt i f f

-Appe l l ant, v. L EI W ANG, D efend a nt-A pp ellee
.

A pp eal from the United S t ates Di strictC our t fo r the E astern Di stricto f Wisc onsin
. No . 1:0 8-cv-00 96 2-WCG

—WilliamC. G riesbach, Judge .
A RG UE D J UNE 8, 2011

— D ECI DE D J UL Y 5, 2011

Befo re P OSNER, K ANN E , an d H A MI L T ON, Circ uit Ju dg es . P OSNER, Cir cu i tJudg e . I n a di ver si ty sui t that pr ese nts i s s ue s o fWi s c onsi n c o mm o n l a w, S c hr e ib e r F o o ds charg es Lei W ang with fra ud

. The d i str i ct c ourtgr anted su m m ar y j udg m en t i n f av o r ofthe de fen dan t o n the gr ound that the sui t w as bar re d by W i sco nsi n’s ve rs i on o fth e e c o n o mi c - l o s s d o c t r i n e o ft o r tl a w. LeiW an gi s anAm er i ca n c i ti ze n o fChi ne se de sc en t w h o ow n s a n au to m ot ive -p ar ts su p p ly b u sin es s in C h i-2 N o. 10

- 3762 cago . A co usi n ofher s w h o lives i n China, Cade W ang, runs a pai r of tr ading com panie s, one of w hi ch is n am ed M atur e S ky. ( Ori gi nal l y a defendant alo n g with Lei W ang, M atur e S ky w as neverse rv ed, and the dist ri ct j udg e di smi ss ed i t f r o m the c as e, wi th o utpr ej ud ice
. ) To si m pl i fy the opinio n we’ l l pr et en d tha t th e two t r ading com panie s a re actual l y o ne, and cal l i t M atur e S ky. M atur e S k y di d b us i ne ss wi tha l ar g e Chi ne se manufac tu re r of d air y p ro d u c ts ca lled Inn er M on go l i a Y ili I nd ustr i alGroup ( “Yi l i ”)
. Cade W ang a ske d his co usi n to he lp him find a s u p p li er i n th e U nited States of dairy product i ngre die n ts. LeiW ang went to China and m et w ith ex ec u tiv es of Yili to ge t a b et te r id ea o fw h a t Y ili w an ted. Retur ni ng to the U ni ted S tat es she a pp ro ached S ch r eibe r, a l ea di ngs uppl i ero fda i r y pr o duct s an d dai r y pr o ducti ng r edi en ts , a nd t o l d J ul i etPr es co d, the Schr eiberGlobalSal es A sso ci ate with whom she deal t, th ata l th o ug h s he reall y di dn’ t k no w any th i ngabo utthe dair y b usi ness, Yi l i w as intere ste d i n buyi ng i ngre die nts for d airy prod uc ts in the U nited States th r o u gh M atu re Sky. She d id n’t claim to be an agen t of Y il i, how ever. Pres cod asked Le i W an g to sup p ly he r w ith cred it inform ati o n a b o utY i l i
. Le i Wan gf o r wa r de d the r e qu e s tto h er co u sin , w h o fa x e d w h at ap p ea re d to be (an d for a ll w e k n ow w as ) an au th en tic sign ed co p y o fY ili’s c re d it sta tem ent. Shortly aft e r w a rd M atu re Sky ordered a batch of a w hey pr ote i n concen tr at e fro m S chre iberatan a gr eed pri ce o f$4 2, 240. The tr ansact i on was a succes s, tho ugh because o fdel ay i n tr ansfer ring m oneyfro m China LeiN o. 10

- 3762 3 W ang pai d Schr eiber w i th a check i ssued byher autom oti ve- parts co m pany; she w as re i m burs ed by M atur e S ky. A few m onths l ate r Lei W ang ne got i ate d w i th Pr esco d th e s ale by S c h r e i b e r to M at u re Sky of 20 0 m et ric tons of “Dem i nera l i zed W hey Pow der 70% ” ( D70 ), a n i ngre die nt i n i nfa nt f or m ula

. S chre iber s et a pri ce o f $6 03 , 00 0. Le i W an gt o l d Pr es co d tha t al th o ug h the pri ce was sti ff, Yi l i was w i l l i ng to pay i t; the unm i stak abl e i m pli cati on

— g i v e n th e p r i o r c o u r s e o fd ea l i ng

— w as th at M at u re Sky w ou ld be bu yin g t h e D 7 0 o n be h alf ofYi l i
. S chre ibercl ai m s that thi s was a m i sr epres entation; th at Y il i w as no t com m itte d t o b uy ing Sch reiber’s D70 fro m M atur e S ky. A l though S chre iberhad contr acted to sel l D70 t o M at u re Sky , i t d ec id ed to su b st itu te R ed u c ed M in er als W he y B len d ( R M W -2) w ithou t tell ing Y il i, M atu re Sky, o r ei therW ang about the s ubsti tuti on. I t cl ai m s that R M W

- 2 i s m ate ri al l y i denti calto D70

— y e ta p r e v i o us shi pm ent b y S chre ibero fRM W

- 2, to ano therChines e com p an y, a deal al so hand l ed by Pres cod, had f ai l ed to cle ar cu st om s in C h i n a; th e c u st om s o fficia ls h ad d e c l ar ed th at it d id n ’t s at isfy th e C h in es e h yg ien ic st an d ar d for w h e y p ow d er . Sch re ibe r d id n ’t re ve al t h is c on tr et em p s t o Y ili or th e o th er s. It d id se n d a sa m p le o fRM W

- 2 to M atur e S k y ( o fc o ur se w ithou t r ev ea l i ng th ati t was n’ t D70 ) b efo r e the s al e o fthe 2 00 metr i c to ns was c o ns um m at ed, a nd M atur e S k y a cc ept ed i t. Butthe sam ple had b een hand

-bl ended i n a l abor ato ry to m ake i t l oo k a nd ta ste j ust l i ke D70, r atherthan bei ng ta ken f ro m an RM W

- 2 pro du cti on l i ne.4 N o. 10

- 3762 W e are d isap p ointed th at a com p an y ofSc hreiber’s st an d in g (it h as $3 billion in a n n u al re ve n u es ) w ou ld d o w h at it d i d : s u b st itu te for t h e p ro d u c t s p ec ified in i ts contr act w i th M atur e S ky, witho ut di scl osur e, an in gr ed ien t in infa n t fo rm u la t h at it kn ew h ad p r e v i o u sly b ee n refu se d en tr y in to C h in a o n h y g ien ic g ro u n d s. In an y even t th e 200 m etric ton s w ere sh ipp ed , a n d a p p aren tly th ey m ad e itth ro u gh C h in es e c u st om s . B u t Y ili r efus ed to a cc eptthe pr o duct, on th e g r o und tha t “the p ro te in w as l ower, f at w as hi gher, and .

. . the fl avor is differ ent” f ro m wh at i t had expecte d. Sch re iberwas ne ve r pa i d, a nd r efus ed to a cc eptthe r etur n o fthe product, f orwh ich appare ntl y there was no m ar ket b e c a us e i twa s p e r i s hab l e a nd h a d d e t e r i o r a t e d. Schr eiber ’ s co ntra ct was with M atur e S ky ra therthan wi thYi l i, b utS ch r eibe r i s no t at pr es en t pur su i nga ny re m ed ies it m igh t h av e a ga in st M at u re Sky . In st ea d it cl ai m s that LeiW ang’ s r epres entat i on t o P re scod that Y il i ha d agreed to bu y the 20 0 m etric tons from M atu re Sky was fra ud ule nt; and i t no te s that Cade W ang g ave L ei W an g a 17.5 p ercen t ow ne rship i nt erest in M atu re Sky a nd thus a fi nanci alst ake i n M atur e Sky’ s pro fi ts, though s he cl ai m s t o have been unaw ar e o fthe gi ft. W i th o uta tt empti ng t o r es o l ve a nyf ac tu aldi spu te s, the di st r i ctj udg e r ul ed th ate ve n i fLe i W an gdi d de f r au d Schr eiber, its sui t a gai nst he r w as bar re d by the ec onom i cl o ss do ct r i ne ; whethe r thi s r ul ing was c o r r ec t i s th e onl y i ssue w e nee d add re ss. T h e a sp ec t o f th e d oc t rin e t h at is ap p lica b le t o t h is c as e b ar s t or t l i abi l i ty w hen the pla i nti ffhas a co ntra ctN o. 10

- 3762 5

w i th the defendant and contr act l aw pro vi des an a deq u ate r em edy f orthe type ofi nj ury al l ege d. Courts p re fer p ar tie s t o go v e r n th eir rela tio n s t h ro u gh p riv at ely nego ti ate d contr acts wh en thatis feas ibl e ( that i s, wh en tr ansact i on co sts

— th e co st s o fmakinga n e ffec ti ve c o ntr act

— are low ), prov ided there a r e n o third -party effects , as ther e a re f orexam ple w h en t he per f or m ance o f a co nt r ac t ca us es po l l ut i o n t o thi r d pa r ti es . Co nt r ac ting parti es know thei r busi ness bett ertha n a cour t ca n and so can al l oca te ris k and r esponsibi l i ty between them m or e in te llige n tly th an a c ou rtco u ld d o . “ [T ]or t la w is a s u p e r fl u o u s a n d i n a p tt o o l f o r r e s o l v i ng p u r e l y c o mm er ci aldi sp utes. W e hav e a bo dy ofl aw desi gned f or s uc h d i s p u t e s . I ti s c a l l e d c o n t r a c tl a w . . . . [ C ] o mm er c i a l d i s p u t e s o u g h t t o b e r e s o l v e d a c c o r d i n g to t he pri nci ple s o fco m m er ci all aw r atherthan acco rdi ng to tor t pr i nci ple s desi gned f oracc i dents that ca use p er s on al inj u ry or p ro p er ty d am ag e. A d isp u ta n t s h ou ld not be per m i tt ed t o opt o ut o fco m m er ci all aw by re fusi ng to ava i l hi m sel fo fthe opportunities w hi ch that l aw gi ves hi m . ” M iller v. U nited Sta tes S t e e l C o rp . , 90 2 F. 2d 573, 574- 75 ( 7th Ci r. 19 90) ( W i sco nsi n l aw ) ; se e D aane n & Ja ns s e n, Inc . v. Ce darapi ds, Inc . , 57 3 N
. W
. 2d 842, 847-50 (W is. 1998). This bra nch ofthe eco nom i c- l oss doctr i ne st em s fro m S e e l y v. W

hi t eM ot orCo
. , 403 P.2d 145, 15 0 -5 1 (C al. 1965). The pla i nti ffi n that case had boughta tr uck that turned ou t t o ha ve de fec ti ve b r ak es . The t r ucko ve r tu r ne d b ut the pl ai nti ffwas not hurt; norwas ther e dam age to any o therpro perty
. H e su ed in both co ntra ct a nd to rtto re cove r re pai r cos ts and l ostpro fits . T he co urt hel d that6 N o. 10

- 3762 he was l i m i te d t o s ui ngf o r b r ea chof w ar r an ty
. I m po sing to r t l i ab i l i ty, whi chwoul d b e st r i ctl i ab i l i ty for a pr o ductde fect, wou l d ha ve pr ev en te d the pa r ti es t o the sal e o fa product fro m ag re ei ng be tw een th em sel ves on th e al l o ca ti o n o fthe r i sko fa pur ely c o m m er ci allo ss , a nd ofthe re sponsibi l i ty f ortr yi ng t o m i ni m i ze i t. “Had d efe n d an t n otw a r r a n t e d th e t ru c k, bu t s old it ‘as is,’ it shoul d not be l i abl e forthe fail ure ofthe tr uck t o ser ve pla i nti ff’ s busine ss needs. ” Id. a t 15 0. “ To a l l o w [ th e p lai nt iff] to use tort law i n effect to en force an oral w arr an tywoul d uns et tl e co nt ra ct s bye xpo sings el l er s to the risk ofbeing he ld li able by a j ury on t h e b asis of selfin te re st ed ora l te st im on y a n d p er h ap s m a d e t o p ay p u n iti ve a s we l l a s c o mpe ns a t o r y da mag e s . T hi s me na ce i s av er te d b y c ha nne l i ngdi spu te s i nt o war r an ty( co ntr act) l aw , wh er e o ra l warra nti es can be e x p re ssl y di scl ai m ed, or exti ngui shed by oper ati on of the par ol evi dence r ule

. ” Al l

- Te c h Te l e c o m, In c . v . Amwa y Corp. , 174 F.3d 862 , 866 (7th C ir. 1999) (W iscons in l aw ). Bu t s up pose the s el l ero fthe truck, kno w i ng i t was d efe c tiv e, h a d t old th e p lain tiff t h atit w as in m in t c on d itio n, an d , th u s re as su re d , th e p lain tiff h a d w aiv ed all w ar ra n ties i n exchange f ora l ower pri ce. That would be a ca se i n whi cha pe r so n h ad be eni nd uc ed t o s i g n a contr act ( ora gr ee to parti cul arpro vi si ons i n a c ontr act) by fra ud o n the part ofthe othe r party . M an y s tat e cour ts don’tapplythe doctr in e ofeco nom i c l oss i n such a c as e b u t in st ea d p er m it t h e d efr au d ed p ar ty t o s u e in tor t. W i th ou t such an excepti on “ pros pecti ve parti es to contr acts wil l be ab le to obt ai n l ega l pro tect i on a gainst f r au d o nl y b y i ns i st i ng tha t th e o th erpa r tyt o theN o. 10

- 3762 7

co nt r ac t r edu ce a l l r epr ese nt at i o ns t o wri ting, a nd so ther e wil l be add i ti onalco ntra ctualnego tiat i ons, contr acts wil l be l onge r, and, i n shor t, tr ansact i on co sts w i l l be hi gher

. A nd the add i ti on al cos ts w i l l be i ncurr ed i n the m aking o fever y c om m er ci alco ntra ct, notj ust the t i ny fracti on that e nd up i n l i ti gat i on. ” Id. at86 7; se e also S t e v e n C
. Tou rek, T hom as H
. Boy d & Ch arles J

. S c h o e n we t t e r, “ B u c k i n gth e ‘ T r e n d ’ : T h e U n i f o r m C o mm er ci alCode, the E c onom i c Loss Doctr i ne, and Com m on L a w C au se s o f A c tio n for Fr au d an d M isr ep re se n ta tio n,” 84 Iowa L. Re v. 87 5, 89 1- 95 ( 1999 )
. True, the parti es c o ul d inc l ud e a c l a us e wa r r a nt i ngtha tthe y had ma de no i ntenti onalm i srepres entat i ons i n the cour se ofnego tiating the cont ract. Bu t the negot ia t io n of su ch a w arr an ty woul d be co m pl i ca te d an d en g en der sus pi ci o n. The unavai l abil i ty ofpuniti ve dam age s in contr act case s wo ul d a l s o be a pr o b l e m; b e c a us e fr a ud i s c o nc e a l e d, pu ni ti ve dam age s m ay be necess ar y f or deter ence. W ith a to r t su i t f o r fr au d a s ano ption in t he b ac k g r o und o fthe nego ti ati ons, part i es can n eg oti ate a l i m i tat i on o fl i abi l i tyf o r fr au d i fthe y want, a s i n Extra Equ ipam e nt os e E xp o rtaç ão Ltd a . v. Ca se C o rp . , 54 1 F
. 3d 7 19 , 72 2- 26 (7th C ir. 2008). Se ver alst ate s, however, incl ud in g W i sco nsi n, r eco gni ze on l y a v e r y na r r o w f r a ud e xc e pt i o n t o the de ni a l o f re cove ryf oreco nom i c l oss . ( Ex cepti ons that var y fro m state to s tat e a re a com m on feature ofthe eco nom i clos s do ct r i ne . S ee Antho ny N ibl et t, Ri ch ar d A. Po sn er & A nd re i Shl ei fer, “The Evol uti on of a Legal Rule, ” 3 9 J
. Legal St ud. 3 25 , 3 34

- 36 ( 20 10 )
. ) The se st at es ho l d tha t th e f r au d m us t be “ex tran eou s” to the cont ract, rath e r t ha n “int er-8 N o. 10

- 3762

w ov en ” w ith it, to b e ac tio n ab le as a t o r t. Wick enh a user v. Leh tinen , 734 N
. W
. 2d 855, 868 -6 9 (W is. 2007); Kal ot iEn t epr i s e s , In c . v . Ke l l ogg S al e s Co
. , 69 9 N
. W .2d 20 5, 21 9-2 0 (W is. 20 05 ); D igi co rp, Inc. v. A m eri t e ch C o rp . , 66 2 N. W
. 2 d 6 5 2 , 6 6 5

- 6 6 ( Wi s . 2 0 0 3 ) ; J o h n J
. L a u b me i e r, C o mm ent, “Dem yst i fyi ng W i sco nsi n’s E c onom i c Loss Doctr i ne, ” 2 005 Wi s . L
. R e v. 2 25, 23 7- 40; se e a l so H uron To ol & E nginee ri ng C o. v. P re cis ion Co nsultin g Service s, Inc. , 53 2 N
. W
. 2d 541, 544-45 (M ich. A p p . 1995). The ex tr an eo us ve r su s i nt er wov en f o r m ul a i s no t pel l uci d, but the f acts and anal ysis in the Kaloti E nterp rises case hel p us to understa nd it . Kel l oggso l d cer ealto a w hol es al er, Kalo ti, kno w i ng tha t be cause K al otiwas a w h ole sa ler it w as bu yin g t h e c er ea l in o r d e r t o re se ll it to r etai l er s. Kell oggdi d not t el l Kalo tithati t had deci ded to se l l cer eal d ire ctl y t o K al oti ’ s princi pal custom ers. A s a result of th at d ec ision, those cu stom ers re fu se d to bu y from K alo ti, p re fer rin g t o b u y d ire c tly f ro m Kell oggnow that th ey c ou l d. The cour t hel d that K el l ogg ’ s i m pli ed r ep re senta ti on t o K al otithatthe l att er c o ul d r e s e l l the c e r e a l ( a ta r e mune r a t i v e p r i c e : do ubt l ess at som e pr i ce Kal otico uld have unl oaded the cer ealo n the c ustom er s, wh o w er e no t, so f aras appears , r equi re d t o b uydi r e c t l y fr o m Ke l l o g g ) wa s a n “ e xt ra ne o us ” fr a ud

. T he i m p li ed r e p resen tation d id n ot con cern K ell ogg’s perf or m ance o fthe c ontract, as i t would have done had i tc o nc e r ne d the qua l i t y o r c ha r a c t e r o fthe p r o du ct, but r athe r “a m att erwh ose r i sk w as neverco ntem pla ted to be a parto f t h e contr act” ; i t was “no t a m att erthat w as d ea lt w ith in t h e c on tr ac t, n or w ou l d o n e e x p ec t it to be d ea l t with i n the contr act. ” Kalot iEnt epr i s e s , Inc . v. Ke l l ogg S al e s Co ., sup ra , 69 9 N
. W
. 2d at 220, 22 8.N o. 10

- 3762 9 The cri ti cal phrase i s th e last

— “norwould one expect i t to b e dea l t with in the c o nt r ac t. ” The r at i o na l e f o r the bro ader fra ud exc ep tion that a num bero fo therst ate s have em bra ced i s that fra ud pl aces the other partyto t h e co n tr ac t a t a n info rm at ion d isa d va n ta ge . N ow it is tru e tha t pa rties to a con tract often hav e un eq ua l inform at ion goi ng i n, and or dinar i l y a party with superi or i nfo rm ati on is enti tl ed to expl oi t i t in nego ti ati ons. ( For a f am ous exam p le, see Lai dl aw v. O rgan , 15 U
. S. (2 W he at
. ) 1 78 ( 18 17 )
. ) Othe r wi se b us i ne ss m en ’ s i nc en ti ve s to o bt ain c o m m er ci al l y v al uabl e i nf o r m at i o n, a nd bydo i ngs o s pee d the a dj us tmento fpr i ce s t o n ew c o ndi t i o ns o fsuppl y a nd de man d, wo ul d b e i mpa i r e d. Em e r al d Inve s t m e nts Li m i t e d Par t ne rship v. Al l m e r i ca Fi nan cia l Life Ins. & A nn uity C o ., 5 1 6 F .3 d 6 12, 616-17 (7th C ir. 2008 )
. But that i s di ffer ent fro m o btaini ng an i nfo rm ati on a dvantage o verthe othe r partyto the contr act by f r a ud

. Y et a s t h e W isc on sin co u rt s re c og n ize , no t a ll frau d s in a co nt r ac tu als et tingha ve tha t effec t, a nd the fr au d al l ege d i n thi s ca se i s a g oo d e x am ple o fo ne thatdoes not
. The f al se ne ss o fa f al se r epr es en ta ti o n b y Le i W an g tha tY i l i wa nt e d the 2 0 0 me t r i c t o ns o f( s up po s e d) D70 w oul d und oubte dly r educe the probabi l i ty that S chreib erwoul d e ve r c o l l ec t th e $6 03 , 00 0 sa l e pr i ce . But th atpr o bab i l i tywas a l way s wel l b el o w 10 0 per ce nt
. The contr act w as w i th M atur e Sky, an obs cure m i dd l em an i n a f o r ei g n c o unt r y, a nd ha d b ee n pr o cur ed forthe tr ader b y the o wne r o fa c o mpa nyi n a b us i ne s s ( a ut o par ts ) unr el at ed to tha t o f Schr eibe r o r M atur e S k y . The tr ader w as expecti ng to r ese ll t h e pr oduct to ano ther Chi ne se c o m pan y, one wi thwhi chS ch r eibe r ha d no10 N o. 10

- 3762

co nt r ac t; a nd a s f ara s S ch r eibe r kne w, i ftha t co m pan y ( Yi l i ) r efus ed to b uy the pr o ductfr o m M atur e Sky, the lat te r w ou ld be u n ab le t o s e ll it to a n yo n e e lse , an d if it becam e stuck w i th the pro du ct i t m i ght b e unabl e o r unw i l l i ng to pay Schr eiber

. A nd fi nal l y S chre ibe r d id not sh i p the pr o ducttha t i t ha d c o nt r ac te d t o s el l, a nd thus assu m ed the risk that the p r o d u ct it did ship w ou ld tu rn ou t n otto be sa lab le in C h in a a t all, w h ich w ou ld j u st ify M at u re Sky in re fu sin g to ac c ep t it ; an d if it r efus ed, the pr o duct, b eingpe r i sh able, m i g htb e wor th

l ess and s o a dead l oss to S chre iber

— as i t turned out to be. Schr eiberact ed re ckl ess l y in f ai l i n g t o tak e s teps t o prot ect i tse l fag ai nst a r ange ofr i sks o fnon paym ent, o f w hi ch fra ud byLeiW ang, o ne o fthe g o-betweens, was o nl y o ne . Th e r i s k o f no np a y men t wa s s o s a l i ent a r i sk th ato ne woul d e xpe cti t to ha ve been d ea l t wi thi n the co nt r ac t. I t’ s no t as i f co nt r ac t l aw co ntains no re so u r c e s fo r d ea lin g w ith su c h a m at te r. Sc h re ibe r c ou ld have done m any t h ings to prot ect i tse l f, such a s re q u irin g M at u re Sky or Y ili to ob ta in a let te r of c re d it for Sch re ib e r’s benefit guaran teeing p aym en t by M atu re Sky; o r obt ai ni ng a contr actual guar anty f ro m Yi l i ; o r at th e v er y l eas t warni ng M atur e S ky that i t was sh ip p in g R M W -2 ra th er th an D 70 . Sc h r e ibe r faile d in ne g o ti at i ngthe c o nt r ac t to t ak e el ementary pr ec au ti o ns f o r a n int erna ti o na l s hi pm en t an d no w w an ts th e j ud i ci ar y t o bai l i t o ut. S ch r eibe r ’ s co nduc t th us c ame wi th i n the “ i nt er wov en ” ex ce pti o n t o W i sc o ns i n’ s f r au d e xc ept i o n t o the do ctr i ne of econom ic l oss an d m ore broad ly w ithin t h e theoryN o. 10

- 3762 11 beh ind the d octrine, w hic h a s w e said is to requ ire p riv at e o rd er in g of c om m er c ial re lat ion s w h er e f e as ible an d not h arm fu l to third pa rties. J us t as “w he re there ar e wel l

- dev el o ped co nt r ac tu alr emedi es , s ucha s th e re m edi es that the Unif or m Com m er ci alCode ( i n f or ce i n all U
. S
. s ta te s) pr o vi des f o r b r ea cho fwar r an tyo fthe qua l i ty, fi tn es s, or spec i fi ca ti o ns o fg o o ds, the r e i s no need to pro vi de to rtr em edi es f orm i sr epres entat i on, ” A ll

Tec h Te l e co m , Inc . v. Am way Corp. , sup ra , 174 F. 3d at 865, so whenthe r e ar e wel l

- dev el o ped co nt r ac tu al mean s of p ro te c tin g a ga in st risk of n on p ay m en t t h er e is l i kewis e no need t o provi de to rtr em edi es. Schr eiberi nvoke s a se cond excepti on in W i sco nsi n l aw to th e ec o no m i c- l o ss do ct r i ne , ho wev er, a nd tha t i s th e d oc tr in e’s n on ap p lica b ility t o c on tr ac ts for t h e s ale of s er vic e s r at h er th an of go od s. E .g., Ins uranc eCo. of N or t h Am e r i ca v. C e as eE l e ct r i c Inc . , 68 8 N
. W
. 2d 462, 46 7- 72 ( 2004 )
. M ostst ate s do not apply the doct rine to pro vi ders ofspeci fi ed professi onalse rv i ces, such a s doct or s, law ye rs , an d arc h ite c ts . See , e.g., B il t- R it e C ontract ors, Inc. v. A rc hite ctural Studi o , 86 6 A.2 d 270, 28 4- 85 ( Pa. 20 05) (ar c h ite c ts ); C o llins v . Rey na rd, 60 7 N
. E.2 d 1 185, 11 86- 87 ( Il l. 19 92 ) (law ye rs ); To mmy L
. G r i f f i n Pl u mb i n g& He a t i ng C o. v. Jordan, Jones & Go ulding, Inc. , 46 3 S
. E.2 d 85, 88

- 89 (S.C . 199 5) (e n gin ee rs ); Che w v . Pa u l D. M eye r, M
. D. , P. A. , 527 A
. 2d 828, 831-32 an d n . 2 ( M d . A p p . 1987) (doct ors). The re i s o ften a n extr em e a sym m etr y o fi nfo rm ati on betw ee n s ell erand buyerwh en the se l l eri s the pro vi der of a p rofession al servi ce. M an y cli en ts d on’t u nd erstan d professiona l services an d so can not neg otiate effecti vel y for pro tect i on a gainst pr ovi ders’ negl i gence .12 N o. 10

- 3762 That i s why the l aw i m p os es fi du ci ar y duti es on s uch p rovide rs, d ut ies t h a t go beyon d the d ut y of care i m po se d b y a neg l i g en ce s ta nda r d a nd r equi r e th e pr o vi dert o t r ea t hi s cus to m era s wel l a s he woul d want to be treated him self. The Suprem e Cour t o fW i sco nsi n has deci ded to si m pli fy the exce pti on byexte nd i ng i t t o al l pro vi ders of se rv ice s, n otj u st p ro fes sio n als

. Ins u ra nce C o. of North Am e r i ca v. Ce as eEle ct r i c Inc ., sup ra , 68 8 N
. W
. 2d at 472; Sh ister v. P a tel , 776 N
. W
. 2d 632, 637 (W is. A p p . 2009); Andre w Gra y, Not e, “ Dr o wni ngi n a S ea o fCo nfusion: Apply i ngthe Ec o no m i c Lo ss Do ct r i ne t o Co m po ne nt Part s, S er vi ce Contr acts , and Fr aud,” 84 Was h. U
. L. Re v. 1513 , 1524-27 (2006). T his op en s t h e w ay for Sch reiber’s argu m ent that LeiW ang i s no t pr ote cted bythe doctr i ne be cause she wa s p ro vidi ng a ser vi ce t o Schr eiber ra therthan buyi ng g oo ds fro m i t. The de fen dan t i n Sh ister v. P a tel w as a re ales tat e bro ker ; LeiW ang was a ki nd o fbr oke r. Bu t th e a pp l i cati on o fthe doctr i ne to herwould be perv er se. Rather than be i n g m ore know l edgeabl e about the s ubj ect m atte r of t h e c on tr ac t t h an Sc h re ibe r, sh e w as le ss kn ow le dg e a b l e . Any wa y the Wi s c o nsi n c o ur t s h a v e a l r e a dy tu m bl ed to the f ac t th ata l i te rali nt er pr et at i o n o fthe excepti on would be untenabl e be cause e very s al e o f g o o ds i nvolve s th e pr o vi si o n o fs er vi ce , i fo nl y b y the em plo yee s o r othe r age nts who nego ti ate the contr act, supervi s e p e r f o r man c e , a nd s o f o r th, a nd s o the e xc e pti on would swal l ow th e ru le (though o ften the em plo yee oro therag ent, but especially an em plo yee , would beN o. 10

- 3762 13 j u d g me n tp r o o fa n d s o n o t wo r th s u i n g )
. T h e S u p r e me Court ofW i sco nsi n has he l d ther ef or e that the se rv ices excepti on a pp lies o nl y i fthe contr act i s pre dom inantly on e fo r se rv ice s, L i n de n v . Ca s c ad e St on eCo
. , 69 9 N
. W
. 2d 18 9, 193- 94 ( W i s. 20 05)

— whi c h the c o nt r a c tb e t we en Schr eiberand M ature S ky w as not. I t was a contr act f or the s al e o fgo ods. The pro vi sio n o f servi ces w as l i m i ted to se rv ice s n or m ally inv olv ed in s u c h sa les , s u c h a s , in thi s ca se, fi nd i ng a sel l ero fa product d esi re d by th e a ge n t’s p rin c ip al. I m posi ng l i abi l i ty on LeiW ang would notcorrect an unj us ti fi ab le i nf o r m at i o n a sy m m et r y ; i t woul d pl ugno ot h er loop h ol e in co n tr ac t la w eit h er , sin c e, as w e s aid ea r l i er, S ch r eibe r c o ul d e as i l y ha ve pr o te cte d i ts el fc o ntr actual l y a gai nst the r i sk ofnonpaym ent that i t s eek s e x p o s tt o s h i ftt o L e i Wa n gb y i n v o k i n gt o r tl a w. A FFI RMED .

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