Dtpa (Consumer Law)

Front 1

Texas Deceptive Trade Practices Act (DTPA)

Back 1

Construction application and waiver
The DTPA shall be liberally construed and applied to promote its underlying purposes which are to “protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection. Liberally construed and generally can not be waived.

Front 2

Waiver

Back 2

With only a few exceptions any waiver of the Act is contrary to public policy and unenforceable and void. Act may be waived only if: 1. Waiver is in writing and signed by consumer; 2. Consumer is not in a significantly disparate bargaining position; and 3. Consumer is represented by legal counsel in seeking or acquiring the goods or services. Any waiver is void with out these 3 req.

Front 3

Terminology

Back 3

Consumer—only a consumer may maintain a private cause under the DTPA; Business consumer—Buying for a business purpose is included unless it has assets of 25million or more; Goods—Tanible property and Real Estate excludes intangibles and $ money; Services—Does not include merely lending money; Unconscionability—not common law or UCC taking advantage of someone to a grossly unfair degree; Knowingly—required to recover mental anguish damages up to 3xs econ damages; Intentional—is require to recover up to 3xs mental anguish damages; Economic damages—DTPA General damage standard. Includes all pecuniary losses; actual damages—standard for all other statutes and tie-in claims under the DTPA; Tie-in Statute—another state statute that makes a violation of that stat a violation of it actionable through the DTPA.

Front 4

Applicability: Proper Party π—consumer

Back 4

An individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or services, except that the term does not include a business consumer that has assets of $25 million or more, or that is owned or controlled by a corporation or entity with assets of $25 million or more. An entity that seeks or acquires 1. Property 2 seeks or acquires 3. By lease or purchase 4. Any goods or services.

Front 5

Seek or acquire

Back 5

Purchase or have a good faith intent to purchase and the ability to purchase. No requirement you consummate the transaction. Need not be a transfer of goods.

Front 6

Acquire

Back 6

If you are in an intended beneficiary you acquire through another’s purchase. If you are an incidental beneficiary you don’t. There need not be privity of contract.

Front 7

Other examples of acquire (1-3 Intended Bene; 4-7 Incidental)

Back 7

1. a tenant may be a consumer w/ respect to services purchased by a landlord; 2 an employee may be a consumer with respect to goods purchased by an employer; and 3. A purchaser of property may be a consumer with respect to an inspection paid for by the seller. 4. A passenger riding in a car is not a consumer with respect to the car; 5. A friend who borrows goods in not a consumer with respect to the goods; 6. An employee who occasionally uses goods is not a consumer with respect to the goods; and 7. A fiancé of a consumer is not a consumer with respect to goods purchased by the consumer.

Front 8

Purchase or lease—not usually an issue

Back 8

To be a consumer under the DTPA, an entity must do more than merely seek or acquire goods or services. The goods or services must be sought or acquired by “purchase or lease.” Totally free services are not subject to the DTPA. Purchase is broadly defined to include any consideration.

Front 9

Other examples:

Back 9

1. a child is a consumer with respect to services paid for by the parent; 2. A person who receives legal services paid for by another is a consumer with respect to those services; 3. A wife is a consumer with respect to services purchased by the husband; and 4 a purchaser is a consumer with respect to accounting services paid for by the seller. Did the person claiming to be a consumer acquire the goods by a purchase. Consumer does not have to be the one who pays.

Front 10

Goods or Services

Back 10

Goods is defined to mean tangible chattels or real property purchased or leased for use. Services is defined to mean work, labor or service purchased or leased for use, including services furnished in connection with the sale or repair of goods. Goods include Real Estate under the DTPA. Excludes money and intangibles. Services does not include a pure loan.

Front 11

Lending money

Back 11

Merely lending money is not subject to the DTPA, but if from the consumer’s perspective the loan was an essential part of the transaction it is subject to the act.

Front 12

Goods purchased for resale are purchased for use.

Back 12

Buying inventory is subject to DTPA. Purchasing for any purpose is “for use” according to Texas courts.
1. business consumers covered 2. Business consumers w/ assests of $25 mil. Or more are excluded 3. Non-business consumers are covered regardless of assets.
A ∆ has the burden to prove the business consumer exception as an affirmative ∆

Front 13

1995 Exemptions

Back 13

Professional Services

Nothing in the DTPA shall apply to “a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill.”

Test: what is the essence of the service. The exception is services specific not profession specific.

Front 14

1995 exemptions cont

Back 14

As a general rule, lawyers, doctors, accountants architects, engineers, generally perform exempt professional service BUT there are exceptions.

Front 15

Exceptions to the exemption:

Back 15

Does not apply to: 1. An express misrepresentation of a material fact that cannot e characterized as advice, judgment, or opinion; 2. A failure to disclose information in violation of section 17.46. ; 3. An unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion; or 4. Breach of an express warrant that cannot be characterized as advice, judgment, or opinion. Even a professional service is subject to the act for a material representation, a failure to disclose, unconscionability, breach of warranty.

Front 16

Personal Injury Claims

Back 16

Nothing in the chapter shall apply to a cause of action for bodily injury or death or the infliction or mental anguish. Economic damages and mental anguish damages arising from a PI are recoverable under sec. 17.50

All damages arising from a PI are recoverable as actual damage under 17.50(h) if the claim is based on a tie-in statute.

Front 17

Large Transactions Written Contracts

Back 17

The DTPA does not apply to a claim arising out of a written contract if the contract relates to a transaction project or set of transactions related to the same project involving consideration by the consumer of more than $100k. 1. Signed K 2. The consumer must be represented by an attorney 3. The exemption does not apply to residence. (does not apply to the purchase of a house)

Front 18

Large Transactions over 500k

Back 18

The DTPA does not apply to cause of action arising out of a transaction, a project, or a set of transactions relating to the same project, involving a total consideration by the consumer of more than 500 K

Front 19

Who may be sued?

Back 19

1. Basis of the complaint/no privity

Privity is not a requirement under the Act. As long as the goods or services form the basis of the consumer’s complaint he may sue any entity that violates the act. In connection with requirement—to be actionable a violation of the Act must be in connection with the consumer’s transaction. No suing up the line of manufacturers.
manufacturers.

Front 20

Claims under the act (Four Claims)

Back 20

DTPA provides that a consumer may maintain an action where any of the following constitute a producing cause of economic damages or damages for mental anguish: 1. The sue or employment by any person of a false, misleading, or deceptive act or practice that is A. Specifically enumerated in a subdivision of subsection (b) of section 17.46 of this subchapter; and B. riled on by a consumer to the consumer’s detriment (laundry list); 2. Breach of an express or impoled warranty; 3. Any unconscionable action or course of action by any person; or 4 the use or employment by any person of an act or practice in violation of chapter 541, insurance code. 4 separate but cumulative claims. Conduct may give rise to more than one.

Front 21

Reliance

Back 21

Statutory element of a laundry list claim.

Front 22

Cumulative

Back 22

Multiple claims for the same act but single recovery.

Front 23

Laundry List

Back 23

The DTPA includes a list of 27 acts or practices that are deemed to be false, deceptive, or misleading under the act. This list is generally referred to as the “laundry list”. Most common. Same conduct may violate many parts.

Front 24

Reliance required

Back 24

X buys something for wife. It hurts wife due to misrepresentations of the salesman. B/c X a consumer his wife may recover b/c he relied on the misrepresentation to her detriment.

Front 25

Prohibited practices

Back 25

The laundry list makes 27 different acts and practices prima facie false, deceptive or misleading. Generally misrepresentation about goods or services (quality) 2. Misrepresentation about legal rights 3. A failure to disclose.

Front 26

No Privity/Knowledge/Intent

Back 26

Violations of the laundry list are actionable w/o regard to privity and may occur prior to simultaneously with or after a contract has been formed. It is also significant to note that knowledge or intent is not an element of a laundry list violation, unless required by the particular subdivision. This is a substantial change from common law fraud. No Req. that ∆ have culpable mental state unless the statute requires it.

Front 27

General Misrepresentations: most common that are used

Back 27

To constitute a violation it is only necessary that the actor makes a representation of fact regarding goods or services that is inaccurate or false. Statements may be oral or written. Statements that constitute mere opinion, or puffing, are not actionable under the DTPA (p. 13 for examples).

Front 28

Parol Evidence Rule & SOF

Back 28

Inapplicable under DTPA

Front 29

Misrepresentations regarding legal rights

Back 29

Asserting legal rights that do not exist violate DTPA (see examples p. 14.)

Front 30

Failure to disclose (omissions)

Back 30

The consumer must establish 4 elements: 1. The ∆ knew information regarding the goods or services; 2. The information was not disclosed; 3 there was an intent to induce the consumer to enter into the transaction; and 4. The consumer would not have entered into the transaction on the same terms had the information been disclosed. One of the few provisions that requires intent.

Front 31

Breach of Warranty

Back 31

The DTPA is both an independent basis for a cause of action and a vehicle through which to bring an otherwise existing claim. Any breach of warranty is actionable by a consumer under the DTPA. DTPA does not create any warranties—The warranty must be established outside of and independent of the DTPA. The breach is actionable through the DTPA. May be created by statute or common law—Look to every Texas Statute and all common law to see if a warranty and see if limited or disclaimant. Warranties may be disclaimed—is not effected by the fact it is brought through the DTPA. Analyze the warranty claim as if no DTPA. If a breach go to the DTPA for damages.

Front 32

Breach of Warranty—Express and implied warranties under the Ch.2 of the business and commerce code

Back 32

Any UCC Warranty is actionable to the DTPA

Front 33

Breach of warranty—Remote Manufaturer

Back 33

Consumer may not assert implied warranty under the DTPA against remote manufacturers.

Front 34

Breach of warranty—implied warrant of suitability in commercial leaseholds

Back 34

The property is fit for its intended purpose maybe waived. An “as Is” clause generally waives it.

Front 35

Breach of Warranty—Implied Warranty of goods and workmanlike Performance in Service Contracts.

Back 35

In a K for repair or modification of tangible chattels there is a warranty it will be done in a good and workmanlike manner—no waivers.

Front 36

Breach of warranty—no implied warranty for professional services

Back 36

Professional services do not make an implied warranty of good and workmanlike performance.

Front 37

Breach of Warranty—Implied Warranty of good and workmanlike performance and habitability in sale of NEW home

Back 37

Good and workmanlike manner may be waived. Habitability generally not.

Front 38

Art 21.21

Back 38

The use of or employment of an act or practice in violation of this art. Of the texas insurance code. Note that this claim is similar to a claim for breach of warrant in that it must be established outside of the DTPA. Any violation of the art. Is a violation of the DTPA. Not a tie-in statute.

Front 39

Defenses—

Back 39

Little in the way of statutory defenses and common law does not apply. You can eliminate damages or negate damages by saying “as is”

Front 40

Mediation/ Arbitration

Back 40

DTPA is subject to arbitration.
DTPA allows either party to compel Mediation.