Consumer Law Flashcards
What does DTPA stand for?
Texas Deceptive Trade Practices Act
What is the purpose of the DTPA
to protect consumers against false, misleading, deceptive business practices, unconscionable actions and breaches of warranty
to provide efficient/economical procedures to secure such protections
Can the DTPA be waived?
generally no.
can be waived only if:
- in writing, signed by consumer
- consumer not in significantly disparate bargaining position
- consumer represented by legal counsel in seeking/getting goods or service
DTPA only applies to Consumers. What is a Consumer?
an individual, partnership, corp., state or subdivision/agency who seeks or acquires by purchase or lease goods/services
Can a Business be a Consumer?
yes, but it won’t include a business with 25+ mil in assets (or owned/controlled by a corp/entity with that much in assets)
D has burden to prove business consumer exception as affirmative defense
DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What does it mean to seek or acquire?
seek/acquire: any purchase or good faith attempt to purchase
no requirement to pay/consummate the transaction
DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What are goods or services?
Goods: tangible chattels or real property (not lending money/intangibles), including items for resale (inventory)
Services: work, labor, service, repair, sale, insurance (not merely lending money)
DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What does purchase or lease mean?
(anything free doesn’t count)
purchase: broadly defined and consumer doesn’t have to be the one to pay
- kid is consumer for services paid by parent
- person who gets legal services paid for by another is consumer
- wife is consumer for services of husband
test: did person claiming to be consumer get goods/services by purchase
Who acquires the goods when they seek/acquire (so as to be considered a consumer)
- the purchaser
- any intends beneficiaries of the purchaser
- tenant can be consumer for services bought by landlord
- employee can be consumer for goods bought by employer
- property buyer can be consumer for inspection paid by seller
Who does NOT acquire the goods when someone else seek/acquires (so they are not considered consumers)
incidental beneficiaries
- passenger riding in car is not consumer of car
- friend who borrows things
- employee who occasionally uses a good
- fiance of consumer not consumer for goods
When Lending money could be subject to DTPA
typically just lending money is not subject to DTPA
But: if from consumer’s prospective, the loan is an essential part of the transaction it’s in the act (ex; must get loan to buy car)
Statutory Exceptions to the DTPA
- doesn’t apply to newspapers that publish ads w/o knowledge they are false, misleading, deceptive
- doesn’t apply to act/practice authorized by FTC
Professional Service Exception to the DTPA (1995)
- doesn’t apply to claim for damages based on professional service-essence of which is providing advice, judgment, opinion, professional skill
ex: lawyers, doctors, accounts, engineers
compare: real estate broker listing house (covered) v. giving sales ideas and appraisal (not covered)
Exceptions to the Professional Service Exception to the DTPA
this exemption keeping professional service out of the DTPA doesn’t apply to:
- express misrep. of material fact (not advice/judgment)
- failure to disclose info
- unconsc action (not advice/judgment)
- breach of express warranty (ex: dr. telling patient nose will look like Monroe’s)
Personal Injury Claim and the DTPA (1995)
ex: Take care to get fixed, they don’t, it crashes, you’re hurt. Claim under DTPA can recover:
- economic loss including value of care and medical
-mental anguish only if est. car ppl acted knowingly
but can get damages from personal injury from tie in stat (then get all damages alleged)
Large Transactions and the DTPA (2)
- Written contracts with consideration of 100K or more DTPA doesn’t apply (not residences)
- DTPA doesn’t apply to a cause of action from transaction involving total of 500K all the time
Who can the consumer sue under the DTPA?
anyone who violates the act. no privity is required as long as goods/services is basis of complaint
Who CAN’T the consumer sue under the DTPA?
remote parties: upstream manufacturers or suppliers not a party to the sale
to be actionable, the violation of the act must be in connection with the consumer’s transaction
The 4 Claims under the DTPA
They are separate but cumulative (one recovery):
- use/employment of false, misleading, deceptive act/practice. that is:
- -specific issue on the laundry list and
- -relied on by consumer to consumer’s detriment - Breach of express/implied warranty
- unconscionable act/course of action
- Use/employment of act/practice in violation of insurance code
Laundry List
a claim under the DTPA made up of 27 acts/practices deemed false, deceptive, misleading
Most Common:
- genearl misrep.
- MIsrep. about the law
- Failure to disclose
Reliance Required by the Consumer to bring claim under the DTPA
reliance must be by any consumer to the consumer’s detriment
means there can be more than one consumer.
ex: H relies on salesmen’s misrep. buys something for W and it damages property, H and W both consumers, can both bring claim
Is Privity or Knowledge required for a laundry list violation?
no, laundry list is actionable w/o regard to privity
violation can occur prior to, simultaneous w/, or after contract formed
knowledge/intent is not required for laundry list violation (unless the particular violation requires it)
ex: didn’t know of problem and didn’t mean to misrep., doesn’t matter-still laundry list violation
General Misrepresentation, a Laundry List Violation under the DTPA
it’s only necessary that the actor makes a representation of facts regarding goods/services that is inaccurate of false
- statement can be oral or written
- statement that are just opinions/puffing/vague generalizations are not actionable
ex:
- misrep regarding coverage of title insurance
- misrep that the property drains
- misrep the house complies with code
Does Parole Evidence Rule and SoF apply to the DTPA?
Nope
Misrepresentations Regarding Legal Right, a Laundry List Violation under the DTPA
misrep of legal rights is actionable but a valid contract interpretation by a lawyer is not
ex:
- misrep that layaway gave seller rights to get money back
- landlord misrep of right to enter/take things
- misrep regarding right to tow car
Failure to Disclose, a Laundry List Violation under the DTPA (4 elements)
consumer must est. 4 elements:
- D knew info regarding the goods/services
- info was not disclosed
- intent to induce the consumer to enter transaction
- consumer would not have entered transaction on same terms if info been disclosed
No need for any sort of special relationship
Breach of Warranty, a Claim under the DTPA
any breach of warranty is actionable by the consumer under the DTPA
the DTPA doesn’t create any warranties outside of what already exists
doesn’t work if warranty has been properly disclaimed
Most Common Warranties brought under DTPA
4
- All express/implied warranties under Art. 2 UCC
- but not against remote manufacturer, remember - implied warranty of suitability in commercial leases
- that the lease will fit it’s purpose
- can be waived - Implied warranty of good/workmanlike performance in service contract
- may not be waived - Implied warranty of good/workmanlike performance and habitability in sale of new home
- 2 separate warranties
- workmanlike can be waived
- habitability can’t
(no implied warranty for professional services)
Chapter 541, Insurance Code Claim, Claim under DTPA
use or employment of act/practice in violation of that chapter is actionable under DTPA
not considered a tie in statute
Consumer Must give notice of claim under DTPA
unless filed as counter claim consumer must give written notice 60 before filing:
- nature of claim
- amount of damages
(not mandatory for class actions)
Remedy, if consumer fails to give adequate notice of claim under DTPA
adequate notice is 60 days before filing (containing nature of claim and damages sought)
if doesn’t give that, abatement to allow notice
Why Notice of claim under DTPA is important
what must be included in settlement offer
notice of claim under DTPA is important to give D a chance to offer settlement
settlement offer must include:
- any offer to pay money (cash value) for damages
- amount to compensate consumer for attorney fees
Effect of Consumer Rejecting Settlement offer (after consumer gives notice of his claim under DTPA)
reasonable rejection of settlement limits consumer’s recovery
if settlement offer same/substantially/more than damages found by trier of fact, consumer can only get lesser of:
- amount damages in settlement offer
- amount found by trier
precludes punitive damages
limits consumer’s attorney fees
When must an Action under the DTPA be filed?
must commence w/in 2 years after date on which false/misleading/deceptive practice occurred
or w/in 2 years of consumer discovering it/should have discovered it
courts use date of injury to determine when consumer should have discovered act
To Bring a Cause under the DTPA consumer must show causation:
Producing Cause: substantial factor which bring about injury and w/o which injury would not have occurred