Can we contract out of North Carolina's unfair and deceptive trade practices statute?
The authorities cited here establish the claim, its remedies and its scope, not a general anti-waiver rule. N.C.G.S. § 75-1.1(a) declares unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, unlawful; § 75-1.1(b) defines 'commerce' to include all business activities, however denominated, 'but does not include professional services rendered by a member of a learned profession'. The remedy is not discretionary: under § 75-16 a person, firm or corporation injured by an act done in violation of Chapter 75 has a right of action, and 'if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict'. Fees are discretionary and one-sided in their triggers: § 75-16.1 lets the presiding judge, in his discretion, allow a reasonable attorney fee to the attorney for the prevailing party, but only on a finding either that the party charged willfully engaged in the act or practice and unwarrantedly refused to resolve the matter, or that the party who brought the action knew or should have known it was frivolous and malicious. On the merits, Marshall v. Miller holds that 'in determining whether a violation of G.S. 75-1.1 has occurred, the question of whether the defendant acted in bad faith is not pertinent', and states that 'a practice is unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers'.
The trap
Two things a drafter gets wrong. First, § 75-1.1 is not a consumer statute: it reaches unfair or deceptive acts 'in or affecting commerce', and 'commerce' is all business activities however denominated, so a business-to-business supply agreement is inside it while a claim against a member of a learned profession for professional services is outside it, and under § 75-1.1(d) the party claiming to be exempt carries the burden of proof on that claim. The learned profession is not the only carve-out: § 75-1.1(c) also puts outside the section the publication or dissemination of an advertisement by a newspaper, periodical, radio or television station or other advertising medium, where the owner, agent or employee did not know of the advertisement's false, misleading or deceptive character and the medium had no direct financial interest in the sale or distribution of the advertised product or service. Second, the limitation period is the pressure point rather than a waiver clause: § 75-16.2 bars any civil action brought under Chapter 75 unless commenced within four years after the cause of action accrues, a period the same section suspends while the Attorney General or a district attorney prosecutes a civil or criminal proceeding over any matter complained of, and for one year after, the action then being barred unless commenced within the period of suspension or within four years of accrual, whichever is later. And in Warren v. Cielo Ventures the Supreme Court of North Carolina enforced a one-year contractual limitation period against a UDTPA claim, holding that parties may agree to decrease the general limitation period if no statute forbids a shorter period and the shorter period is reasonable, that the legislature 'has not prohibited downward adjustment of the limitation period for UDTPA claims', and that summary judgment for the defendant was therefore right. No North Carolina statute making § 75-1.1 rights non-waivable by contract was found: of the published North Carolina sections carrying the phrase 'may not be waived' or 'shall not be waived', none is in Chapter 75, and no Supreme Court holding to that effect was read, so nothing here asserts that a § 75-1.1 claim is immune from contract, and Warren runs the other way on the limitation period.
14 authorities
- statuteN.C.G.S. § 75-1.1enactment date not established
The words that state the rule
Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful. (b) For purposes of this section, "commerce" includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.
- statuteN.C.G.S. § 75-1.1enactment date not established
The words that state the rule
(c) Nothing in this section shall apply to acts done by the publisher, owner, agent, or employee of a newspaper, periodical or radio or television station, or other advertising medium in the publication or dissemination of an advertisement, when the owner, agent or employee did not have knowledge of the false, misleading or deceptive character of the advertisement and when the newspaper, periodical or radio or television station, or other advertising medium did not have a direct financial interest in the sale or distribution of the advertised product or service.
- statuteN.C.G.S. § 75-16enactment date not established
The words that state the rule
If any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict.
- statuteN.C.G.S. § 75-16.1enactment date not established
The words that state the rule
In any suit instituted by a person who alleges that the defendant violated G.S. 75-1.1, the presiding judge may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing the prevailing party, such attorney fee to be taxed as a part of the court costs and payable by the losing party, upon a finding by the presiding judge that:
- statuteN.C.G.S. § 75-16.2enactment date not established
The words that state the rule
Any civil action brought under this Chapter to enforce the provisions thereof shall be barred unless commenced within four years after the cause of action accrues.
- statuteN.C.G.S. § 75-16.2enactment date not established
The words that state the rule
When any civil or criminal proceeding shall be commenced by the Attorney General or by any of the district attorneys of the State to prevent, restrain or punish a violation of Chapter 75, the running of the period of limitation with respect to every private right of action arising under Chapter 75 and based in whole or in part on any matter complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter; provided that when the running of the period of limitation with respect to a cause of action arising under Chapter 75 shall be suspended hereunder, any action to enforce such cause of action shall be barred unless commenced either within the period of suspension or within four years after the cause of action accrued, whichever is later.
The words that state the rule
Careful examination of the applicable precedent in this jurisdiction and our interpretation of the intent of the Legislature leads us to conclude that, in determining whether a violation of G.S. 75-1.1 has occurred, the question of whether the defendant acted in bad faith is not pertinent.
The words that state the rule
A practice is unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.
The words that state the rule
Thus any possible implication in Smith that a party must show bad faith in order to recover treble damages for a violation of G.S. 75-1.1 is expressly overruled.
- caseNo. 203PA24 (N.C., filed 20 March 2026)Warren v. Cielo Ventures, Inc.N.C.decided 2026
The words that state the rule
Thus, parties may agree to decrease the general limitation period for bringing claims if: (1) no statute forbids a shorter period, and (2) the shorter period is reasonable. The legislature has established a four-year limitation period for bringing UDTPA claims, N.C.G.S. § 75-16.2 (2025), and in the absence of an agreement to the contrary, this limitation period controls.
- statuteN.C.G.S. § 75-16.1enactment date not established
The words that state the rule
(1) The party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit; or (2) The party instituting the action knew, or should have known, the action was frivolous and malicious.
- statuteN.C.G.S. § 75-1.1enactment date not established
The words that state the rule
Any party claiming to be exempt from the provisions of this section shall have the burden of proof with respect to such claim.
- caseNo. 203PA24 (N.C., filed 20 March 2026)Warren v. Cielo Ventures, Inc.N.C.decided 2026
The words that state the rule
Though the parties’ agreement provided for a one-year contractual limitation period to bring any claim arising from the subject matter of the contract, plaintiffs filed an unfair and deceptive trade practices claim against defendant nearly three years after plaintiffs knew of defendant’s wrongful conduct.
- caseNo. 203PA24 (N.C., filed 20 March 2026)Warren v. Cielo Ventures, Inc.N.C.decided 2026
The words that state the rule
The legislature has not prohibited downward adjustment of the limitation period for UDTPA claims, and plaintiffs have failed to demonstrate the provision is unreasonable. Accordingly, the trial court did not err in concluding defendant was entitled to judgment as a matter of law on plaintiffs’ UDTPA claim. We reverse the decision of the Court of Appeals. REVERSED.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.