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An Overview of the Texas Deceptive Trade Practices Act

The Texas Deceptive Trade Practices Act or “DTPA” is a set of statutes designed to supplement traditional common-law causes of action. The DTPA seeks to punish false, misleading, or deceptive acts or practices in the conduct of any trade or practice. Because of the Act’s liberal construction and attractive monetary remedies, it provides a powerful weapon to a broad range of plaintiffs.

In order to sustain an action under the DTPA one must be a “consumer”, as defined by the Act. A consumer is one who seeks or acquires by purchase or lease, any goods or services. Business consumers with assets of $25 million or more are excluded. A consumer may bring an action under the DTPA for a person’s use of a false, misleading, or deceptive act prohibited by the Act (the so-called “laundry list”) that is relied upon by the consumer, breach of an express or implied warranty, any unconscionable action by any person, or a practice violating Chapter 541 of the Insurance Code. It is extremely important to note that, unless specified, the laundry list claims do not require the imputation of knowledge or intent upon the defendant. In this regard, violations of the DTPA are considered to be “without fault”. While the laundry list is comprised of 27 separate unlawful actions, the most often cited violations fall under misrepresentations regarding goods or services, misrepresentations regarding agreements or legal rights, and failures to disclose material information.

The DTPA does not apply to a claim for damages based on the rendition of a professional services where the essence of the services involves the provision of advice, judgment, opinion, or similar professional skill. Thus, most services provided by architects, attorneys, and doctors are exempt from the DTPA. However, a misrepresentation of material fact, certain failures to disclose information, unconscionable acts that cannot be construed as advice, judgment, or opinion, or breaches of express warranty that cannot be characterized as advice, judgment, or opinion do not qualify for the professional services exemption.

The DTPA also contains two exemptions for large transactions. Under the first exemption, claims arising out of a written contract involving consideration in excess of $100K are exempt. Under the second exemption, claims arising out of a transaction, a project, or a set transactions related to the same project that involve consideration of more than $500K are exempt. Neither of these exemptions apply to transactions involving the consumer’s residence.

Consumers are required to provide defendants with at least 60 days’ notice prior to filing suit under the DTPA. The notice must provide a reasonably detailed description of the consumer’s specific complaint and the damages sustained by the consumer. Upon receiving the notice, the defendant may offer to settle the dispute. A settlement offer is material because it has the potential of limiting the consumer’s recovery at trial.

A consumer prevailing under the DTPA may recover his economic damages. A consumer may also obtain damages for mental anguish when the defendant’s conduct was committed “knowingly”. In addition, a defendant may recover additional damages of not more than three times the damages awarded if the defendant acted knowingly or intentionally. Attorney fees are also awarded to a prevailing consumer as a matter of right. A defendant may recover attorney fees for suits that are groundless and brought in bad faith or brought for the purpose of harassment.

Despite statutory overhauls over the years, the DTPA remains a powerful force in our state. Regardless of which side you find yourself in a DTPA claim, Webb & Webb’s attorneys are here to help you navigate the statutory landscape of the DTPA.