What is "Unfair and Deceptive" in Massachusetts Consumer Law?
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There exists two important components of the Massachusetts Consumer Protection Act, chapter 93A. One is section 2 of the Act which relates to situations where a consumer maintains a claim against a business; and section 11 which relates to a claim by one business against another business.
There are countless Massachusetts court decisions that actually describe what is "unfair and deceptive" in a variety of contexts. However, I like to use one case in particular to describe the terms in the business to business context, and the Attorney General Reulations promulgated pursuant to ch. 93A to explain the consumer to business cases.
In 1979, the Massachusetts Appeals Court issued a decision in the case of Willard S. Levings v. Forbes & Wallace. Levings (Trane Air Conditioners) brought an action against Forbes to recover money alleged to be due for repair to an air conditioner in a Sprinfield Mass department store. Forbes refused to pay, and the plaintiff alleged that they were "duped" by Forbes into performing the work. In essence, it appeared to be a garden variety breach of contract claim. In discussing what constitutes a business to business unfair or deceptive act, the court stated that the conduct must be "immoral, unethical, oppressive or unscrupulous", or "must attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce." In other words, mere breach of contract is not an unfair or deceptive act. The court concluded that if, in fact, the goods and services were ordered with no intent to pay, there could be a 93A violation. But, if there was a legitimate dispute regarding the services performed or the issue of payment, there would not be a 93A violation.
In the consumer area, the standard of "rascality" required is not as great as that required in the business to business context. In those AG regulations, known as 940 CMR Chapter 3, the regulations describe the following as potential unfair or deceptive acts or practices: false advertising, deceptive advertising of guarantees, deceptive pricing, general misrepresentations, advertising "easy credit" sales, failure to perform warranties, misrepresentations in home improvement transactions, misuse of the word "free", bait and switch practices, deceptive use of "loss leaders" to induce the purchase of another product, certain landlord tenant violations, and certain unfair insurance practices. Unfair insurance practices are also governed by another stautute, known as ch. 176D. That statute will be a topic for a seperate blog.
There is no "demand letter" requirement in the business to business claim, but there is such a requirement in consumer/business claims. The letter and what is required to be in the letter will be discussed in another blog.
The bottom line is that ch.93A is a very broad and powerful tool in Massachusetts that can be used by both small businesses and consumers to advance legitimate claims. As an attorney that often represents small businesses (Davids) against mega corporations (Goliaths), 93A truly helps level the playing field.