Can a contract term cut off the buyer's Alabama Deceptive Trade Practices Act claim?
The chapter itself, not the contract, sets most of the limits. A person who commits an act declared unlawful by the chapter and thereby causes monetary damage to a consumer is liable for actual damages or $100, whichever is greater, or up to three times actual damages in the court's discretion, plus costs and a reasonable attorney's fee in a successful action (Ala. Code § 8-19-10(a)). "Consumer" means any natural person who buys goods or services for personal, family, or household use (§ 8-19-3(4)). At least 15 days before filing, a written demand for relief identifying the claimant and reasonably describing the act or practice relied upon and the injury suffered must be communicated to the prospective respondent (§ 8-19-10(e)). A consumer or other person bringing an action under the chapter may not bring it on behalf of a class, and the chapter calls that a substantive limitation (§ 8-19-10(f)); only the Attorney General or a district attorney may bring an action in a representative capacity, and in such an action the court may not award minimum or treble damages (§ 8-19-10(g)). The chapter's civil remedies and the common-law or other statutory remedies for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment are mutually exclusive, and an election to pursue the chapter's remedies surrenders all other rights and remedies for those wrongs arising out of a transaction actionable under the chapter (§ 8-19-15(a)); an election to pursue those other remedies surrenders all rights and remedies under the chapter (§ 8-19-15(b)). An action must be brought within one year after the claimant discovers or reasonably should have discovered the act or practice, and in no event more than four years from the transaction unless the contract or warranty is for more than three years; where it is, the action must be brought within one year of the contract's or warranty's expiration date or within one year of discovery, whichever occurs first (§ 8-19-14). A counterclaim enforcing that liability in an action arising out of the same transaction is not subject to that period (§ 8-19-10(b)).
The trap
The election of remedies in § 8-19-15(a) is the trap a drafter cannot fix by contract and a claimant can lose by pleading: suing under the chapter surrenders the common-law fraud claim arising out of the same transaction, and suing at common law surrenders the chapter. Two more from the text: the 15-day pre-suit written demand is a condition on filing (except where the prospective respondent neither maintains a place of business nor keeps assets in the state), and a respondent who, within 15 days of delivery of the demand, makes a written tender of settlement that the claimant rejects and the court later finds sufficient to compensate actual damages cuts off additional damages, fees and costs (§ 8-19-10(e)). The chapter also does not reach everything: § 8-19-7 exempts, among others, activity subject to the Alabama Insurance Code, regulated banks, regulated utilities and railroads, violations of the federal Consumer Credit Protection Act, and activity under the Alabama Securities Act, with the burden of proving an exemption on the person claiming it. Subsection (b) does two things at once. Its first sentence is the election rule running the other way: electing a common-law or other statutory remedy for those wrongs surrenders everything under the chapter. Its second sentence then says: “All other remedies, penalties or actions presently provided by statute or common law or hereafter provided for in any other law or rule of procedure are cumulative with the provisions, remedies and actions in this chapter and this chapter shall not be construed to repeal or supersede any law not inconsistent herewith.” So the chapter does not repeal or supersede fraud, misrepresentation or any other consistent law by existing alongside it: the surrender happens only when the consumer actually elects a remedy for the same act outside the chapter. Reading the surrender sentence alone makes the chapter look exclusive when the section says it is cumulative.
8 authorities
- statuteAla. Code § 8-19-10enactment date not established
The words that state the rule
(a) Any person who commits one or more of the acts or practices declared unlawful under this chapter and thereby causes monetary damage to a consumer, and any person who commits one or more of the acts or practices declared unlawful in subdivisions (19) and (20) of Section 8-19-5 and thereby causes monetary damage to another person, shall be liable to each consumer or other person for: (1) Any actual damages sustained by such consumer or person, or the sum of $100, whichever is greater; or (2) Up to three times any actual damages, in the court’s discretion. In making its determination under this subsection, the court shall consider, among other relevant factors, the amount of actual damages awarded, the frequency of the unlawful acts or practices, the number of persons adversely affected thereby, and the extent to which the unlawful acts or practices were committed intentionally; and (3) In the case of any successful action or counterclaim to enforce the foregoing liability or in which injunctive relief is obtained, the costs of the action or counterclaim, together with a reasonable attorney’s fee. On a finding by the court that an action or counterclaim under this section was frivolous or brought in bad faith or for the purpose of harassment, the court shall award to the defendant (or counterclaim-defendant) reasonable attorney’s fees and costs.
- statuteAla. Code § 8-19-10enactment date not established
The words that state the rule
(f) A consumer or other person bringing an action under this chapter may not bring an action on behalf of a class. The limitation in this subsection is a substantive limitation and allowing a consumer or other person to bring a class action or other representative action for a violation of this chapter would abridge, enlarge, or modify the substantive rights created by this chapter. (g) Notwithstanding the limitation in subsection (f), only the office of the Attorney General or district attorney shall have the right and authority to bring action in a representative capacity on behalf of any named person or persons. In any such representative action brought by the office of the Attorney General or a district attorney, the court shall not award minimum damages or treble damages, but recovery shall be limited to actual damages suffered by the person or persons, plus reasonable attorney’s fees and costs.
- statuteAla. Code § 8-19-10enactment date not established
The words that state the rule
At least 15 days prior to the filing of any action under this section, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be communicated to any prospective respondent by placing in the United States mail or otherwise. Any person receiving such a demand for relief who, within 15 days of the delivering of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning this rejection. If the court finds that the relief tendered was sufficient to compensate the petitioner for his or her actual damages, the court shall not award any additional damages or attorney’s fees or costs to the petitioner. The demand requirements of this subsection shall not apply if the prospective respondent does not maintain a place of business or does not keep assets within the state, but such respondent may otherwise employ the provisions of this section by making a written offer of relief and paying the rejected tender into court as soon as practicable after receiving notice of an action commenced under this section. All written tenders of settlement such as described in this subsection shall be presumed to be offered without prejudice in compromise of a disputed matter.
- statuteAla. Code § 8-19-10enactment date not established
The words that state the rule
(b) The liability provided in this section may be enforced by counterclaim in an action arising from the same transaction without regard to the statute of limitations provided in Section 8-19-14.
- statuteAla. Code § 8-19-15enactment date not established
The words that state the rule
(a) The civil remedies provided herein and the civil remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment are mutually exclusive. An election to pursue the civil remedies prescribed in this chapter shall exclude and be a surrender of all other rights and remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment arising out of any act, occurrence or transaction actionable under this chapter. (b) An election to pursue any civil remedies available at common law, by statute or otherwise, for fraud, misrepresentation, deceit, suppression of material facts or fraudulent concealment arising out of any act, occurrence or transaction actionable under this chapter shall exclude and be a surrender of all rights and remedies available under this chapter. All other remedies, penalties or actions presently provided by statute or common law or hereafter provided for in any other law or rule of procedure are cumulative with the provisions, remedies and actions in this chapter and this chapter shall not be construed to repeal or supersede any law not inconsistent herewith.
- statuteAla. Code § 8-19-14enactment date not established
The words that state the rule
No action may be brought under this chapter more than one year after the person bringing the action discovers or reasonably should have discovered the act or practice which is the subject of the action, but in no event may any action be brought under this chapter more than four years from the date of the transaction giving rise to the cause of action unless the contract or warranty is for more than three years. If the contract or warranty is for more than three years, no action may be brought more than one year from the expiration date of the contract or warranty or more than one year after the person bringing the action discovered or reasonably should have discovered the act or practice which is the subject of the action, whichever occurs first.
- statuteAla. Code § 8-19-3enactment date not established
The words that state the rule
As used in this chapter, the following words and phrases shall have the meanings hereinafter ascribed to them: (1) ATTORNEY GENERAL. The Attorney General of the State of Alabama or his or her duly designated representatives. (2) BONA FIDE INVENTORY REPURCHASE PROGRAM. A program by which an entity repurchases from a salesperson current and marketable inventory in possession of the salesperson, on request and on commercially reasonable terms, when the salesperson’s business relationship is terminated. (3) COMMERCIALLY REASONABLE TERMS. The repurchase of current and marketable inventory within 12 months after the date of purchase at not less than 90 percent of the original net cost, less appropriate set-offs and legal claims, if any. (4) CONSUMER. Any natural person who buys goods or services for personal, family, or household use.
- statuteAla. Code § 8-19-7enactment date not established
The words that state the rule
Nothing in this chapter shall apply to: (1) Acts done by the publisher, owner, agent or employee of a newspaper, periodical, radio, or television station or telephone company in the publication or dissemination of an advertisement, which the owner, agent, or employee did not have knowledge of the false, misleading or deceptive character of the advertisement; (2) Any seller of goods or services who meets all the following requirements: a. Has disseminated advertisement or promotional material from a manufacturer, packer, distributor, or other seller, from whom he has purchased the goods or services, unless the seller knew the advertisement or promotional material to be false or misleading; and b. On the request of the Attorney General or district attorney, provides the name and address of the manufacturer, packer, distributor or other seller from whom he has purchased the goods or services; and c. On the request of the Attorney General or district attorney, agrees in writing to discontinue dissemination of such false and misleading material; (3) Any person or activity which is subject to the provisions of the Alabama Insurance Code, Title 27, as amended, or any bank or affiliate of a bank which is regulated by the State Banking Department of Alabama, the Comptroller of the Currency of the United States, Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System, or to any person or activity which is subject to the provisions of Title 10, Chapter 4, Article 6, or to the regulated activities of any utility, telephone company or railroad which is regulated by the Alabama Public Service Commission; (4) Any violation of the Federal Consumer Credit Protection Act (15 U.S.C. §1601 et seq.); (5) Any activity which is subject to the provisions of the Securities Act of Alabama, Chapter 6 of this title or to the provisions of the Sale of Checks Acts, Chapter 7 of this title; or to the provisions of Article 5 of Chapter 6 of this title (relating to a notification procedure for the issuance of certain industrial revenue bonds). (6) For purposes of this section, the burden of proving exemption from the provisions of this chapter shall be upon the person claiming the exemption.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.