The opinion of the Court was delivered by
In this appeal we consider whether corporate officers can be held personally liable for allegedly tortious conduct under the participation theory of liability. The conduct at issue arose after the corporate defendant entered into a contract with plaintiff pursuant to which it was to design and prepare specifications for the turfgrass to be used on two athletic fields at a New Jersey university. Plaintiff alleged that the corporation and its officers negligently prepared the turfgrass specifications resulting in substantial financial loss to plaintiff. Accordingly, plaintiff sought to recover in tort against the officers personally based on the participation theory of liability.
The trial court granted summary judgment for both individual defendants, concluding that their status as corporate officers insulated them from personal liability. In an unpublished opinion the Appellate Division reversed, holding that the officers’ complicity in the preparation of the allegedly defective specifications could provide a basis for personal tort liability under the participation theory. We granted the officers’ petitions for certification, 167
*300
N.J.
89,
I
In December 1997, plaintiff Jan Saltiel, doing business as Edge-water Design Associates, filed suit against GSI Consultants, Inc. (GSI), a Pennsylvania corporation, Dr. Henry Indyk, a GSI corporate officer, and Richard Caton, a former GSI corporate officer. The complaint sought damages arising from allegedly defective turfgrass specifications prepared by defendants and used by plaintiff in the reconstruction of a softball field and soccer field located at William Paterson University (WPU) in Wayne, New Jersey. Plaintiff is a landscape architect and GSI is a turfgrass consulting company doing business under the name Turfcon. Plaintiff has since voluntarily dismissed her claims against GSI.
The underlying transaction involved WPU’s award to plaintiff in March 1995 of a contract to provide landscaping architectural services for the reconstruction of its athletic fields. Plaintiff in turn requested a proposal from GSI outlining turfgrass specifications for the reconstruction. In February 1995, GSI submitted a proposal, signed by Caton, listing the services that it would perform in connection with the WPU contract. The letter was on the letterhead of Turfcon, and the letterhead stated: “GSI Consultants, Inc./Turfcon Division.” Plaintiff accepted the proposal and engaged GSI to prepare the specifications for the WPU athletic fields. GSI performed the following services: preparation of specifications for the design of a new drainage system; design, preparation of specifications, and testing of a rootzone mixture; preparation of specifications and selection of a new sod; and monitoring of the actual reconstruction, which was to be completed by a contractor selected by WPU after a public bid, ultimately Flanagan’s Inc.
The softball field was constructed first. Indyk, in his capacity as a corporate officer of GSI, made several site visits to monitor the construction of the field and correct any deviations from the *301 turfgrass specifications. The record indicates that WPU has expressed no dissatisfaction with the work done on the softball field.
The soccer field was completed in September 1996. Indyk did not visit the soccer field on a regular basis as had been his practice with respect to the softball field. Almost immediately after its completion, the soccer field developed problems of standing water and inadequate drainage. In response to the problems, WPU installed additional drainage facilities and began core aerification of the soccer field’s turf. However, the drainage did not improve and the turfgrass was consistently damp or soggy. The soccer field remained unfit for athletic use.
Plaintiff hired Turf Diagnostics and Design, Inc. (TDD) to determine the cause of the drainage failure. After an investigation, TDD informed plaintiff that, although the soccer field had been constructed in accordance with GSI’s field specifications, the field specifications had been negligently prepared because the rootzone designed by GSI formed a nearly impermeable barrier that did not allow for proper water drainage. As required under plaintiffs contract with WPU, she prepared new specifications for the field and hired a contractor to reconstruct it at a cost of $351,000. Plaintiffs contract with GSI did not require GSI to provide a bond or demonstrate evidence of professional liability insurance.
Plaintiffs complaint alleges claims against all defendants for negligent design, negligent misrepresentation, breach of contract, breach of warranty, promissory estoppel, and agency liability. The parties conducted discovery that focused primarily on whether defendants Indyk and Catón could be held personally liable. In January 1999, Indyk moved for summary judgment on the ground that he could not be personally liable for acts he performed as an officer on behalf of GSI. The trial court granted summary judgment, reasoning:
It [ ] appears the very purpose for incorporation — one of the purposes is — is to hopefully escape from individual liability or responsibility. And certainly, when *302 you look at the Turfcon letterhead, when they wrote to Jan Saltiel of Edgewater Design Associates, although Turfcon appears on the top of that letterhead, the GSI Consultants, Incorporated clearly appears on the bottom with two phone numbers, and the address of the entity.
So I don’t share the same impression of this case as the plaintiff shares. I — I think the defense is absolutely correct in their motion for summary judgment to dismiss Dr. Henry Indyk from this case. New Jersey law should apply. The fields are about 10 miles from this courthouse, at the William Paterson College, the now William Paterson University in Wayne. The fact that the shares were not signed pursuant to Pennsylvania law, to me, is not of any great consequence, because they were delivered. They’re in the names of the — Dr.—Dr. [Caton], Dr. Indyk, and their wives. They’re in the stock agreement that was entered into as — as well. And there’s no question that Dr. Indyk was acting through his corporation when he agreed to undertake the responsibilities of overseeing the two fields that were being built in William Paterson, or being renovated in William Paterson. So I’m going to grant defendant’s application for summary judgment on behalf of the individual[.]
Thereafter, Caton also moved for and was granted summary judgment, essentially on the basis of the same analysis that supported summary judgment for Indyk. In an unreported opinion the Appellate Division reversed both summary judgment rulings. That court concluded that both Indyk and Catón could be personally liable for negligence under the so-called “participation theory of personal liability.”
II
The sole issue on appeal is whether the trial court properly granted summary judgment in favor of defendants Caton and Indyk. Its resolution requires us to consider: (1) the proper application of the participation theory of personal liability for tortious conduct by corporate officers under New Jersey law; and (2) whether the plaintiffs claim against Indyk and Caton sounds in tort or contract.
We note at the outset that summary judgment may be granted if, according the plaintiff the benefit of all positive inferences from the facts as presented, a trial court determines that plaintiff has failed to assert a genuine issue of material fact.
Brill v. Guardian Life Ins. Co. of America,
142
N.J.
520, 523,
A
The Appellate Division’s opinion correctly determined that our caselaw has recognized the applicability of the participation theory of personal liability for the tortious conduct of corporate officers. Fletcher’s Cyclopedia of the Law of Private Corporations defines the participation theory as follows:
An officer of a corporation who takes part in the commission of a tort by the corporation is personally liable for resulting injuries; but an officer who takes no part in the commission of the tort is not personally liable to third persons for the torts of other agents, officers or employees of the corporation. Officers and directors may be held individually liable for personal participation in tortious acts even though they derived no personal benefit, but acted on behalf, and in the name of, the corporation, and the corporation alone was enriched by the acts.
An officer may be personally liable for a tort to a third person where the corporation owed a duty of care to that person, the duty had been delegated to the officer, and the officer breached this duty through personal fault causing injury. If the defendant’s duty had been delegated with due care to some responsible subordinate, the defendant was not at fault and will not be held liable and the defendant knew or should have known of its nonperformance or malperformance and did not cure the risk of harm.
[3A William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 1137 (rev.perm. ed.1994)(footnotes omitted).]
Thus, the essence of the participation theory is that a corporate officer can be held personally liable for a tort committed by the corporation when he or she is sufficiently involved in the commission of the tort. A predicate to liability is a finding that the corporation owed a duty of care to the victim, the duty was delegated to the officer and the officer breached the duty of care by his own conduct.
*304
New Jersey cases that have applied the participation theory to hold corporate officers personally responsible for their tortious conduct generally have involved intentional torts. More specifically, the majority of the cases have involved fraud and conversion.
See, e.g., Charles Bloom & Co. v. Echo Jewelers,
279
N.J.Super.
372, 382,
Over fifty years ago this Court in
Hirsch v. Phily,
4
N.J.
408, 416,
It is well settled by the great weight of authority in this country that the officers of a corporation are personally liable to one whose money or property has been misappropriated or converted by them to the uses of the corporation, although they derived no personal benefit therefrom and acted merely as agents of the corporation. The underlying reason for this rule is that an officer should not be permitted to escape the consequences of his individual wrongdoing by saying that he acted on behalf of a corporation in which he was interested.
[Citations omitted.]
Other jurisdictions also adhere to that principle. In
Central Benefits Mutual Insurance Co. v. RIS Administrators Agency, Inc.,
93
Ohio
App.3d 397,
A number of jurisdictions, including New Jersey, also apply the participation theory to hold corporate officers personally liable for certain statutory violations. For instance, in
Kugler v. Koscot Interplanetary, Inc.,
120
N.J. Super.
216, 257,
The conduct at issue in this appeal does not implicate intentional tortious conduct, but rather the individual defendants’ allegedly negligent conduct in designing the specifications for the soccer field. Indyk and Caton assert that the participation theory is limited to intentional torts by corporate officers. The Appellate Division, although recognizing the lack of precedent in New Jersey and other jurisdictions applying the participation theory to negligent conduct, was unwilling to limit the doctrine to intention *306 ally tortious acts. That court relied on three New Jersey decisions to support its broader application of the participation theory.
In Tompkins v. Burlington Island Amusement Co., 102 N.J.L. 411, 132 A. 670 (1926), the Court of Errors and Appeals affirmed a judgment against the general manager of an amusement park located on an island in the Delaware River. The general manager’s liability stemmed from his allegedly supervisory responsibility for the defective construction of a “slip” connecting the pier leading to the park to a float that provided access to small boats. Plaintiff sustained injuries when the slip collapsed. The Court relied on the general manager’s alleged responsibility for construction of the defective slip as the basis for his potential personal liability.
In
Sensale v. Applikon Dyeing & Printing Corp.,
12
N.J.Super.
171,
In
Evans v. Rohrbach,
35
N.J.Super.
260,
*307 The problem confronting us here is whether the relationship of the defendants, or of any of them, to the specific industrial operation which gave rise to plaintiffs injuries was sufficiently direct or close so that it may be fairly said that they did participate or co-operate therein to an extent which should preclude their exculpation from liability to the plaintiff [based on negligence] as a matter of law.
[Id. at 264,113 A.2d 838 .]
The decisions in Tompkins, Sensale and Evans arguably support plaintiffs contention that the participation theory is not limited to intentional torts, and that the theory’s application turns only on the question of whether there was actual participation in allegedly tortious conduct rather than on the nature of the tortious conduct. Although the theory may encompass conduct other than intentional torts, that issue has not been settled. Based on the application of the participation theory in other state courts, it may be argued that the theory should be limited to cases involving intentional wrongful conduct by corporate officers, or negligent conduct by such officers that results in personal injuries such as those involved in Tompkins, Sensale, and Evans.
Application of the participation theory to negligent conduct by corporate officers in other jurisdictions also has involved personal injury claims. In
Skelton v. Chemical Leaman Tank Lines, Inc.,
In a very recent Maryland case,
Shipley v. Perlberg,
140
Md.App.
257,
As noted by the Appellate Division, the Pennsylvania Supreme Court has applied the participation theory to negligence claims. In
Wicks v. Milzoco Builders, Inc.,
503
Pa.
614,
In a case somewhat analogous to the facts in this record, the Maryland Court of Special Appeals affirmed a judgment against the president of a construction company for his participation in negligent conduct that resulted in severe cracks and holes in a brick wall attached to the plaintiffs house.
St. James Construction Co. v. Morlock,
89
Md.App.
217,
B
Whatever may be the appropriate standard for limiting corporate officers’ liability under the participation theory, the essential predicate for application of the theory is the commission by the corporation of tortious conduct, participation in that tortious conduct by the corporate officer and resultant injury to the plaintiff. If, however, the breach of the corporation’s duty to the plaintiff is determined to be governed by contract rather than tort principles, the participation theory of tort liability is inapplicable. Accordingly, because the plaintiffs relationship with GSI initially was defined by the contract between them, we consider the principles that reliably serve to distinguish contract and tort claims.
As explained by the Appellate Division in
Wasserstein v. Kovatch,
261
N.J.Super.
277, 286,
At common law a plaintiff who had a contractual relationship with the defendant was able to sue in tort if the plaintiff could establish that the alleged breach of duty constituted a “separate and independent tort.”
Id.
at 407. However, “the boundary line
*310
between tort and contract actions is not capable of clear demarcation.”
New Mea Construction Corp. v. Harper,
203
N.J.Super.
486, 493,
Prosser & Keeton offers seven guidelines to assist in distinguishing between tort and contract claims:
(1) Obligations imposed by law are tort obligations;
(2) Tort obligations may not be disclaimable;
(3) Misfeasance or negligent affirmative conduct in the performance of a promise generally subjects an actor to tort liability as well as contract liability for physical harm to persons and tangible things;
(4) Recovery of intangible economic loss is generally determined by contract;
(5) There is no tort liability for nonfeasance, i.e., for failing to do what one has promised to do in the absence of a duty to act apart from the promise made;
(6) Duties of affirmative action are often imposed by law apart from the promises made;
(7) Damages for a loss suffered by a promisee in reliance on a promisor to carry out a promise may be recoverable on a tort negligence theory.
[Prosser & Keeton, supra, § 92, at 656-58.]
Clearly relevant to the facts of this case is the fourth guideline. Prosser & Keeton states that “[generally speaking, there is no general duty to exercise reasonable care to avoid intangible economic loss or losses to others that do not arise from tangible physical harm to persons and tangible things.” Id. at 657. In fact, most jurisdictions hold that a contractor’s liability for economic loss is limited to the terms of the contract.
In
Redarowicz v. Ohlendorf
92
Ill.2d
171, 65
Ill.Dec.
411,
Nonetheless, relationships created by contract can give rise to affirmative duties imposed by law. For example, although limited in scope, a bailment invariably gives rise to tort liability when the bailee takes possession of the bailor’s property, separate and apart from the liability imposed by the parties’ contract.
Prosser & Keeton, supra,
§ 92, at 658. “The obligations as between parties to such contracts are not always obligations based entirely on the manifested intent of the parties.”
Ibid. See also Flintkote Co. v. Dravo Corp.,
As explained by this Court in
Walker Rogge, supra,
116
N.J.
at 540,
Several New Jersey cases illustrate the legal analysis that courts have applied in determining whether a party’s claim sounds in contract or tort. In
Juliano v. Gaston,
187
N.J.Super.
491,
The contention that a distinction should be drawn between mere ‘economic loss’ and personal injury is without merit. Why there should be a difference between an economic loss resulting from injury to property and an economic loss resulting from personal injury has not been revealed to us. When one is personally injured from a defect, he recovers mainly for his economic loss. Similarly, if a wife loses a husband because of injury resulting from a defect in construction, the measure of damages is totally economic loss. We fail to see any rational reason for such a distinction.
[187 N.J.Super. at 498,455 A.2d 523 (quoting Barnes v. Mac Brown and Co., Inc., 264 Ind. 227, 342 N.E.2d 619 (1976)).]
The plaintiff homeowners in
Aronsohn v. Mandara,
98
N.J.
92,
In
New Mea, supra,
203
N.J.Super.
486,
Similarly, in Album Graphics, Inc. v. Beatrice Foods Co., 87 Ill.App.3d 338, 42 Ill.Dec. 332, 408 N.E.2d 1041, 1049. (Ill.App.Ct. 1980), an Illinois appellate court refused to enforce a cause of action sounding in negligence where the plaintiff was seeking to recover remedies that essentially were contractual. The court observed that
[pllaintiff allegedly has a contract with defendant. Defendant has allegedly breached that contract. Plaintiff has suffered only economic losses. Plaintiff should have his remedy for breach of contract, but he should not be allowed to recover under tort law that which he may or may not be entitled to recover under the contract or under contract law. Hence, we necessarily hold that plaintiff in this case has failed to state a cause of action in negligence to recover purely economic losses.
[Id. at 1050.]
See also Flintkote, supra, 678 F. 2d at 949 (holding that Georgia’s “economic loss rule” barred plaintiffs negligence claim).
*314 Two recent federal cases hold that under New Jersey law a party cannot maintain a negligence action, in addition to a contract action, unless the plaintiff can establish an independent duty of care. In International Minerals & Mining Corp. v. Citicorp North America, Inc., 736 F.Supp. 587 (D.N.J.1990), a lender liability case, the corporate loan applicant’s complaint included several claims sounding in tort that also related to its breach of contract action. The claims included “ ‘malicious, and/or intentional, and/or negligent, and/or grossly negligent’ breach of the agreement to finance.” Id. at 596. The court dismissed the claims sounding in tort because the defendant did not owe a duty of care separate and apart from the contract between the parties. Id. at 597. The court stated that “[i]t has long been the law that remedies in tort relating to a breach of contract may not be maintained in addition to those established under the contract itself in the absence of any independent duty owed by the breaching party to the plaintiff.” Ibid.
In
Stewart Title Guaranty Co. v. Greenlands Realty, L.L.C.,
*315
An independent duty was found to exist in
Scribner, supra,
III
Under limited circumstances this Court has applied the participation theory to hold corporate officers personally liable for tortious conduct. See
Hirsch, supra,
4
N.J.
at 416-17,
In rejecting the Appellate Division’s reliance on the participation theory of liability, we rely on the principles set forth in state and federal cases on whether a cause of action sounds in tort or contract.
See, e.g., Aronsohn, supra,
98
N.J.
92,
When a company agrees to render a service or sell a product, a contract normally will define the scope of the parties’ specific obligations. Moreover, in commercial transactions the law may recognize certain implied contractual obligations, such as a builder’s obligation to construct a building or structure in a workmanlike fashion, see
Aronsohn, supra,
98
N.J.
at 107,
In this case the scope of the parties’ obligations was defined by the contract, and the contract imposed responsibilities on defendant GSI only, and not on defendants Indyk and Caton. The expectation was that defendant corporation would design and prepare the requisite specifications for the athletic fields and that plaintiff would compensate the corporation for the work. There appears to have been no expectation that the individual defendants would be personally liable under the contract. Plaintiffs original request for a proposal was directed toward defendant GSI, and the responses received by plaintiff were on a letterhead that specifically included the corporate names “Turfcon” and “GSI, Inc.” Clearly, plaintiff was aware throughout the transaction that she was dealing with a corporate entity and that defendants Indyk and Caton were acting on GSI’s behalf. See
New Mea, supra,
203
N.J.Super.
at 497,
Under New Jersey law, a tort remedy does not arise from a contractual relationship unless the breaching party owes an independent duty imposed by law.
New Mea, supra,
203
N.J.Super.
at 493-94,
Our conclusion is reinforced by the existence of duties that are specifically imposed by law in New Jersey, which can be enforced separately and apart from contractual obligations. For example, a physician is required to act with a “degree of care, knowledge, and skill ordinarily possessed and exercised” in analogous situations by the average member of the medical community.
Aiello v. Muhlenberg Regional Medical Center,
159
N.J.
618, 626,
In addition, the law imposes duties on attorneys. See
McGrogan v. Till,
167
N.J.
414, 425,
We acknowledge that a different analysis and result could be implicated if a soccer player sustained personal injuries proximately caused by the allegedly deficient design work provided by GSI. In that context, because no contract defined the obligations of the parties, a critical issue would be whether GSI owed an
*318
independent duty of care to prospective users of the field and, if so, whether the participation theory would apply. We need not resolve those issues. Here, however, plaintiff alleges damages that do not arise from any duty imposed by law but rather result from GSI’s alleged breach of contract, and include the cost of preparing new specifications and of hiring a new contractor to reconstruct the soccer field. Those allegations are analogous to the claims in
New Mea, supra,
203
N.J.Super.
at 494,
None of the parties dispute the existence of a valid contract between plaintiff and defendant GSI, and GSI’s alleged breach of that contract clearly can give rise to contractual liability. However, plaintiff has since voluntarily dismissed her claims against defendant GSI. As noted, that contract did not require GSI to provide a bond or demonstrate evidence of professional liability insurance. Nonetheless, irrespective of the allegations in the complaint that sound in tort, plaintiff cannot convert basic contract claims into negligence claims in order to create a basis for the imposition of personal liability on corporate officers.
IV
Because this appeal essentially involves a breach of contract claim, making the participation theory of individual liability inapplicable, we reverse the Appellate Division’s judgment and reinstate summary judgment for defendants Indyk and Catón.
For reversal and reinstatement — Chief Justice PORITZ and Justices STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA, and ZAZZALI — 7.
Opposed — None.