This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Consider a hypothetical Florida-governed acquisition that has already closed. The buyer paid for a business on the strength of what it was told during diligence — projections, customer concentration, the state of a key contract. A few months in, the picture turns out to have been materially rosier than reality, and the buyer believes it was not just wrong but misled. The buyer’s lawyers pull the purchase agreement and find what almost every well-drafted agreement contains: a non-reliance clause saying the buyer relied only on the express representations in the contract and on nothing said outside it. The natural question is whether that clause, plus Florida’s old economic loss rule, ends the fraud claim before it starts. The answer, in Florida, is no — and understanding why is the difference between drafting that helps and drafting that gives false comfort.
What the economic loss rule used to do — and what Tiara changed
For years, Florida’s economic loss rule was a workhorse defense. In its broad form it barred tort claims between parties to a contract where the only loss was economic — the idea being that the contract, not tort law, should govern purely commercial disappointments. Defendants in business disputes routinely invoked it to knock out fraud and negligent-misrepresentation claims that traveled alongside a breach-of-contract claim.
That changed with Tiara Condominium Association v. Marsh & McLennan Companies, 110 So. 3d 399 (Fla. 2013). The Florida Supreme Court receded from its broad applications of the rule and held that the economic loss rule is limited to products-liability cases. Outside that context — including in the ordinary commercial and M&A setting — the rule no longer bars a tort claim simply because the parties also had a contract. The doctrinal guardrail that remained is the independent-tort requirement: a plaintiff suing in tort alongside a contract must show conduct that is independent of the breach, established by facts separate and distinct from the failure to perform the contract.
Fraudulent inducement fits that requirement comfortably. Inducing a counterparty to enter a contract through misrepresentation is, by its nature, conduct that precedes and is separate from the later breach of that contract. So after Tiara, a buyer alleging it was lied into the deal is not stopped at the door by the economic loss rule. The claim rises or falls on its elements and on the contract’s allocation-of-risk language — not on a categorical tort bar.
What the non-reliance clause can and cannot do
This is where deal lawyers have to be precise, because a non-reliance clause is genuinely useful and also routinely oversold. What it does well is define the universe of statements the buyer is entitled to rely on. By stating that the buyer relied solely on the express representations in the agreement and disclaims reliance on extra-contractual statements, the clause attacks the reliance element of a fraud claim premised on something said outside the four corners — a stray projection in a management presentation, an offhand assurance in a diligence call. A court applying Florida law can give that disclaimer real effect against extra-contractual fraud, narrowing the claim to the written representations the seller actually made.
What it does not do is license fraud inside the contract. A non-reliance clause does not let a seller knowingly make a false express representation and then hide behind the buyer’s promise that it relied only on the express representations — the buyer did rely on those, and they were false. Nor does Florida law smile on a clause drafted as a naked attempt to waive liability for one’s own fraud; public policy is hostile to contracting away intentional deceit. So the clause channels and narrows fraud exposure to the written reps; it does not extinguish it. A seller who believes a non-reliance clause is a fraud shield has misread both Tiara and the clause.
Drafting that does the real work
Because the economic loss rule is no longer doing the heavy lifting, the contract has to. Three levers matter most.
First is the integration-and-non-reliance pairing. The strongest version is specific rather than generic: the buyer represents that it relied only on the express representations in Article [X], that no other statements were made or relied upon, and it identifies the disclaimed categories — projections, forecasts, and extra-contractual materials. Specificity is what gives a court confidence to enforce the disclaimer against extra-contractual fraud. A boilerplate merger clause buried at the back does less.
Second is the exclusive-remedy and fraud-carve-out architecture. Most purchase agreements make indemnification the exclusive remedy and then carve out fraud. The carve-out’s wording is the whole ballgame: a carve-out for “fraud” without definition invites a fight over whether it means common-law fraud of any kind or only a narrow, defined “deliberate” fraud tied to the express representations. The seller wants the narrow, defined version; the buyer wants room to reach knowing misconduct. This negotiation is doing the work the economic loss rule used to do, and it should be conducted consciously, not left to a template.
Third is the interaction with the buyer’s knowledge. Florida’s post-Tiara landscape makes the sandbagging and knowledge questions sharper, because fraud claims are live. How the agreement treats a buyer that closed knowing a representation was off interacts directly with a later fraud theory, and the two clauses should be drafted to speak to each other. Relatedly, the definition of “knowledge” in the seller’s representations shapes which misstatements can support a knowing-fraud claim at all. These are not separate skirmishes; they are one risk allocation viewed from three angles.
What this means for each side
For sellers, the lesson is that a Florida deal cannot be papered as if the economic loss rule still ends fraud claims. The protection now comes from precise non-reliance language, a tightly defined fraud carve-out, and a clean disclosure process that does not create extra-contractual statements to be sued over. The drafting cannot guarantee a fraud claim never gets filed, but it can confine the exposure to the express representations a seller chose to make and stands behind.
For buyers, the lesson is that the written representations are where the leverage is. Because extra-contractual statements can be disclaimed away, a buyer that wants protection on a particular risk should get a representation about it in the contract rather than relying on what it heard in diligence. The fraud carve-out is the backstop, but the express reps are the front line.
The takeaway
Tiara moved Florida’s economic loss rule out of the M&A dispute and left the contract’s own language to allocate fraud risk. A non-reliance clause still does real work — it narrows a fraud claim to the express representations and can defeat one built on extra-contractual chatter — but it is not a shield against fraud in the written reps themselves, and Florida public policy will not let it become one. The protection lives in specific non-reliance drafting, a deliberately defined fraud carve-out to the exclusive remedy, and knowledge and sandbagging provisions drafted to work together. In post-Tiara Florida, the economic loss rule will not save a sloppy contract; the contract has to save itself.
Our Fernandina Beach office works with buyers and sellers on Florida-governed acquisitions and on the representation, non-reliance, and indemnification architecture that allocates deal risk.
If you are negotiating non-reliance or fraud-carve-out language on a Florida-governed deal and want a second read before you sign, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
