Michigan employs the ELD, but only when the transaction involves two commercial parties. Niebarger v. Universal Cooperatives, 486 N.W.2d 612 (Mich. 1992). The Doctrine does not operate to bar tort claims in lawsuits concerning “the sale of defective products to individual consumers who are injured in a manner which has been traditionally been remedied by resort to the law of torts”. Frankenmuth Mut. Ins. Co. v. Ace Hardware, 899 F.Supp.2d 348 (W.D. Mich. 1995). Michigan recognizes, even between commercial parties, a fraud-in-the-inducement exception to the ELD, which addresses situations where one party was tricked into contracting. Huron Tool & Eng’g Co. v. Precision Consulting Services, Inc., 532 N.W.2d 541 (Mich. App. 2001).

In State Farm Fire & Casualty Co v. Ford Motor Co., 2010 WL 866149 (Mich. App. 2010), the plaintiff purchased a used 1994 Ford F-150 pick-up truck which started on fire some years later in his garage as the result of a defective cruise control. Ford filed a motion for summary judgment based on the ELD as set forth in Niebarger. The Court held that the ELD did not bar the claim because the loss by fire was not anticipated or contemplated by the plaintiffs when they, or even a previous owner, first purchased the vehicle.

When it does apply, the Michigan ELD is broadly applied because it applies to bar recovery of damage to even other property when this damage was within the contemplation of the parties to the agreement. Quest Diagnostics, Inc v. MCI Worldcom, Inc., 656 N.W.2d 858 (Mich. 2002). The ELD does not apply to service contracts. Id.

Ten years after Neibarger, Michigan extended the ELD to cover individual consumer transactions. Sherman v. Sea Ray Boats, Inc., 649 N.W.2d 783 (Mich. App. 2009). It expanded the ELD to the sale of consumer goods, even when the plaintiff consumer enters into a transaction with an entity of greater knowledge or bargaining power. But the ELD involves in consumer cases only when the plaintiff has disappointed economic expectations, NOT where the product bursts into flames. Michigan product liability law defines “economic loss” as including “loss of use of property” and “costs of repair or replacement of property.” M.C.L. § 600.2945(c). In order for the ELD to apply, there must be an underlying transaction which provides the plaintiff an opportunity to negotiate to protect himself. Quest Diagnostics, supra.