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1.2 Nature and Strengths of UDAP Statutes

UDAP statutes apply to most consumer transactions and provide a flexible and practical consumer remedy for many abuses. These statutes are particularly important because, while the Federal Trade Commission Act is often viewed as sharply limiting the doctrine of caveat emptor,5 the Act provides only FTC enforcement and not state or private enforcement. State UDAP statutes, by incorporating the FTC Act concepts of deception and unfairness and by providing significant state and private remedies, allow for widespread redress of marketplace misconduct and abuse of consumers.

A UDAP action is a statutory cause of action rather than a tort or contract action, although it has characteristics of both.6 However it may be necessary for some purposes, such as determining what statute of limitations applies, to classify a UDAP claim as either tort or contract.7

Legislatures and courts have been careful to guarantee that UDAP statutes are broad and flexible, so that they can apply to creative, new forms of abusive business schemes in almost all types of consumer transactions.8 Even when UDAP statutes enumerate specifically prohibited practices, most statutes also prohibit other unfair, unconscionable, and/or deceptive practices in more general terms. UDAP statutes typically do not require proof of the seller’s fraudulent intent or knowledge. In some cases, consumer reliance, damage, or even actual deception is not a prerequisite to a UDAP action. Thus a UDAP claim is a far easier cause of action to prove than common law fraud.

All UDAP statutes except Puerto Rico’s authorize private damage actions. In order to encourage private litigation and deter merchant misconduct, many provide such special private remedies as attorney fees for prevailing consumers and punitive, treble, or minimum damage awards. UDAP statutes often provide a practical remedial approach for consumer complaints, as well as counterclaims and defenses to collection actions.

The breadth of UDAP statutes and their avoidance of overly precise definitions of prohibited practices are their unique strengths. This treatise describes a large body of Federal Trade Commission rules, guides and cases, state regulations and cases, statutory provisions, and other materials that can provide clear guidance in initiating most UDAP claims. But it is when a specific abusive practice has not been previously prohibited by statute or common law that a UDAP statute should be most relied upon. When a practice does not fall precisely under a debt collection act, state or federal credit legislation, warranty law, or other statutes, UDAP statutes can provide an all-purpose remedy. Almost any abusive business practice aimed at consumers is at least arguably a UDAP violation, unless the trade practice clearly falls outside the scope of the statute.


  • 5 {3} Legal historians point out that caveat emptor, or let the buyer beware, is not an ancient doctrine. Medieval economic concepts included a “just price” and “a sound price warranting a sound commodity.” The prices of many goods and services were fixed, allowing courts to examine contracts for their fairness independently of the terms agreed upon. However, emerging nineteenth-century commercial notions of markets, speculation, and business bargains gradually ended notions of contractual fairness apart from the original intent of the bargaining parties. Notions of the sanctity of contracts and caveat emptor thus only reached full development in the nineteenth century. At about the same time, the common law action of Trespass on the Case in the Nature of Deceit that applied even to negligent misrepresentations was replaced by common law actions for deceit or fraud that required the defendant’s knowledge of the falsity and intent to deceive. See, e.g., Morton J. Horwitz, The Historical Foundation of Modern Contract Law, 87 Harv. L. Rev. 917 (1974).

  • 6 {4} Kraft Power Co. v. Merrill, 981 N.E.2d 671, 683–684 (Mass. 2013); Cardillo v. Bolger, 2009 WL 62866 (N.J. Super. Ct. App. Div. Jan. 12, 2009) (finding distinction between tort and contract irrelevant to company owner’s liability for his participation in UDAP violation); Kailin v. Armstrong, 643 N.W.2d 132 (Wis. Ct. App. 2002) (UDAP claim is a statutory action, not a tort).

  • 7 {5} See, e.g., Guidance Endodontics, L.L.C. v. Densply Int’l, Inc., 749 F. Supp. 2d 1235, 1274–1277 (D.N.M. 2010) (test is whether the particular UDAP claim most closely resembles a tort or a contract claim); Walter & Shuffain, P.C. v. CPA Mut. Ins. Co., 2008 WL 885994 (D. Mass. Mar. 28, 2008) (UDAP claim based on insurer’s negligent defense of a claim is sufficiently tort-like so that rules regarding contribution among tortfeasors apply); Green v. N.B.S., Inc., 976 A.2d 279 (Md. 2009) (UDAP claim for lead paint poisoning is a personal injury action based on “tortious conduct” for purposes of statutory cap on non-economic damages); Bridgwood v. A.J. Wood Constr., Inc., 105 N.E.3d 224, 229–232 (Mass. 2018) (UDAP claims may be classified as tort or contract for purposes such as determining whether a statute of repose or a statute regarding survival of claims applies); Baldassari v. Pub. Fin. Trust, 337 N.E.2d 701 (Mass. 1975); Standard Register Co. v. Bolton-Emerson, Inc., 649 N.E.2d 791 (Mass. App. Ct. 1995); Baker v. Oregon City Schs., 2012 WL 762482 (Ohio Ct. App. Mar. 9, 2012) (UDAP action is not a contract action for purposes of governmental immunity).

  • 8 {6} See, e.g., Luskin’s, Inc. v. Consumer Prot. Div., 726 A.2d 702 (Md. 1999); Fletcher v. Don Foss of Cleveland, Inc., 628 N.E.2d 60 (Ohio Ct. App. 1993); Miller v. Keyser, 90 S.W.3d 712 (Tex. 2002). See generally § 2.1.3, infra.