Texas Deceptive Trade Practices - Essay Example

Part I A Multiple Choice One Point Each 20 Points [Circle the best answer] 1. Which of the following was not a requirement for certifying a class action? 1. Commonality 2. Typicality 3. Economy 4. Numerosity 5. Adequacy of representation 2. The economic loss rule is a judicially created rule that: 1. Requires claims for pure economic loss must be brought n contract not tort 2. Limits tort claims to only economic loss 3. Prohibits recovery of mental anguish damages for breach of contract 4. Requires that claims for economic loss must be brought in tort not contract 5. None of the above 3. Which of the following is not a prerequisite for a credit card holder to assert claims and defenses he would have against the merchant, against the credit card company? 1. The transaction must be over $50 2. The consumer must make a good faith effort to settle with the merchant 3. The transaction must be in the consumer's state or within 100 miles of his home. 4. The consumer must report it to the credit card company within ten days. 4. The statute of limitations for a breach of warranty is: 1. I year. 2. 2 years 3. 3 years 4. 4 years 5. Which of the following is not a good under the Texas Deceptive Trade Practices Act? 1. A car 2. A house 1. Stocks and bonds 3. A dog 6. The term "caveat emptor" means: 1. Let the buyer beware 1. You must disclose 2. Empty promises 3. Seller is responsible 7. Credit bureaus process approximately how may pieces of information a day? 1. 50, 000, 000 2. 50, 000 3. 5,000 4. 500 8. Which of the following is not a credit bureau in the United States? 1. Experian 2. TransUnion 3. American 4. Equifax 9. Under the Fair Debt Collection Practices Act, a debt collector may: 1. Never call a consumer at work 2. Call a consumer no more than once a day at work 3. Not call a consumer once the consumer tells the debt collector that the employer does not allow such calls 4. Call a consumer at work any time he wants 10. Which of the following is not included within the term actual damages? 1. Cost to repair a product 2. Lost income 3. Pain and suffering 4. Lost profits 5. None of the above 11. The term "upside-down" means that the consumer: 1. Owes more than her house is worth 2. Was tricked into buying the house by the seller 3. Is so confused that she could not protect herself 4. All of the above 12. Which of the following is not a basis for challenging an arbitrator's decision in court: 1. Fraud 2. Evident partiality 3. Misconduct 4. Disregard of the law 5. None of the above 13. To assert a billing error against a credit card company, the consumer must act within how many days after the bill is sent? 1. 20 days 2. 30 days 3. 50 days 4. 60 days 14. Which of the following involves a voluntary dispute resolution process that is not binding unless the parties come to an agreement: 1. Arbitration 2. Mediation 3. Negotiation 4. All of the above 5. More than one of the above 15. In an action for breach of warranty, which of the following damages may not be recovered 1. Damages for mental anguish 2. Attorney's fees 3. Damages for the cost to repair a defective product 4. Damages for medical bills 5. More than one of the above 16. The Fair Debt Collection Practices Act does not apply to which of the following? 1. A company that collects a debt owed to a plumber for fixing a house toilet 2. An attorney suing to collect a debt owed Visa 3. A company collecting a debt owed Visa 4. Visa collecting its own debts 5. More than one of the above 17. For a misrepresentation under the Texas Deceptive Trade Practices Act, which of the following type of damages may not be recovered: 1. Attorney's fees 2. Economic damages 3. Damages for mental anguish 4. Punitive damages 5. Damages for pain and suffering 18. The Texas Deceptive Trade Practice Act requires notice be sent to the defendant how many days before a lawsuit is filed? 1. 20 2. 30 3. 45 4. 60 19. Which of the following recently has been enacted into law in the U.S.? 1. Credit Card Act 2. Arbitration Fairness Act 3. Consumer Financial Protection Bureau Act 4. More than one of the above 5. All of the above 20. Which of the following is not an appropriate standard by which to evaluate punitive damages under the Constitution? 1. Net worth of the defendant 2. Ratio to the amount of damages awarded 3. Degree of reprehensibility of defendants conduct 4. Sanction for similar misconduct Part B True/False Explain One Point Each 10 Points Total 1. If a father buys a toy for his son, the son may be a consumer under the Texas Deceptive Trade Practices Act? True According to DTPA, if the person acquires a good given by someone else as a gift, there would automatically be a contractual relationship between the seller and the person who received the gift. 2. The best way to prevent identity theft is to review a copy of your credit report? True A copy of the credit card report helps in recognizing the locations and the merchants to whom bills were paid. 3. In an American jury trial, the jury decides issues of fact and law? True In the US criminal cases, a jury often decides issues of fact and law. 4. It is easier to recover damages under a producing cause standard than a proximate cause standard? True Producing cause standard doesn’t require ‘foreseeabilty’ like proximate cause standard requires, hence is easier for recovering damages. 5. If you buy something online, it is best to use a credit card? True On the internet, the human doesn’t get to see your card number as often as they do in credit card payments at restaurants or shopping malls. It may seem scary to use credit card for online purchases, but actually it’s difficult for the number to get stolen with website protections such as SSL [Secure Sockets Layer] which most online payment companies use. 6. Excessive costs may invalidate an arbitration clause? True An arbitration clause may get invalid if the customer finds the arbitration excessively costly. 7. Strict Products Liability, 402A, applies to only the consumer or the user? False 402 A is a special rule which applies to the sellers of products only. 8. A consumer has the right to a free copy of her credit report once a month? False All Americans has the right to a free copy of her credit report once every 12 months. 9. Any business may be a consumer under the Texas Deceptive Trade Practices Act? False Any business doesn’t qualify as a consumer. Only businesses having assets of less than $25 million qualifies as consumers in DTPA. 10. "UDAP" means "You Don't Attack Professors"? False No, it actually means Unfair and Deceptive Acts or Practices Part II Essay Questions Question A Before 1973, consumer law in Texas was not very strong. Some even considered the Texas consumer law to be caveat emptor [customer beware]. In 1973, the Consumer Protection Law in the form of Texas Deceptive Trade Practices was enacted by the Texas government. In a matter of a few years, the DTPA was considered as one of the best consumer protection statutes of the US. Since Casey resides in Texas presently and has purchased a house in Texas, any disputes arising due to property matters, would fall under the DTPA. Casey has been having a harrowing time lately, since she’s come to know someone was brutally murdered in the house, which she didn’t know when she purchased the house. Under the DTPA, she has a wide scope of recovering damages and to make claims under the DTPA. First of all, the seller of the property did not give a clear background of the history of the house and the major events which had taken place in the house. Section 17.44 of the act clearly states that the DTPA tries to protect the consumers against business practices which are deceptive, misleading or false. The breaches of warranty are also severely dealt by the DTPA. In order to qualify as a Consumer under the DTPA, a person must seek or acquire a service or good through lease or purchase. Casey certainly qualifies as a consumer, since she has the house purchase documents. Section 401.006 of the Act involves the builder whereas the Texas Residential Construction Commission is subject to Chapter 325. Moreover, in the case of Casey, the seller of the property properly qualifies as a legitimate seller, since Casey had directly dealt with and purchased the house from the seller with a Texan accent. In DTPA, the remote manufacturer requires some additional tests; however Casey’s seller was not a remote manufacturer. Under the DTPA, a consumer can maintain an action in cases wherein the consumer suffers from mental anguish from the purchase of a good or property which is misleading. The claims can be made under the section 17.50(a). It is stated in this section that the consumer or Casey in this case, can make a claim if she goes through mental anguish as well as economic damages because of a deceptive and misleading practice by the seller. Casey is unable to sleep and is having nightmares all the time, since she is horrified to live alone. The fact that the seller’s mother was brutally murdered in the house and the reason for selling the house was the murder, has made Casey feel very cheated and misled too. She has even suffered a great deal economically, since her work output at her job had decreased. Eventually, she had lost her job because of the mental anguish. In subdivision 17.46, it’s stated that a purchase causing consumer’s detriment qualifies as damage. Moreover, the sale of the property was intended by the seller, since Casey didn’t force the seller to sell the property to her. Under the section 17.50(a), there are four claims which the plaintiff can seek. Firstly, the seller has acted in a way which equated to misrepresentation, since the seller didn’t mention about the murder in the house. In fact, Casey can easily establish a violation of the contract through the Laundry List which pertains to a breach of the warranty and unconscionability. Section 17.46(b) includes four important subsections which is relevant to Casey. They are subsections 5, 7, 12 and 23. 5 and 7 pertain to misrepresentation while subsection 12 concerns misrepresentation regarding agreements. Subsection 23 is yet another important subsection, which pertains to the failure to disclose. The seller didn’t disclose the reason for selling the property to Casey. The implied misrepresentation allows Casey to obtain damages, as per the guidelines of the DTPA. Compensation for the mental anguish of Casey would be applicable, since it has caused a ‘substantial disruption in the daily routine’, has brought about a ‘high degree of mental pain and distress’, and has been ‘ more than mere worry, embarrassment, anger or vexation’ for Casey. [DTPA, 1973] It’s written in DTPA that the court can award three times the amount of damages to the plaintiff, if the defendant is found guilty of deception. Therefore, Casey definitely has a chance to get back three times the damages caused to her economically and mentally. Or in other words, she can get about $900,000 from the seller, along with the economic loss of losing her job. She might also get compensated for the mental anguish caused to her by the deceptive act of the seller. Hence, Casey needs to first hire an attorney and file a DTPA lawsuit for recovering statutory damages. Question B Casey has purchased an oven and a TV from two different dealers, RGM and GBH. The problem is that she’s unable to pay the installments. The collection departments at GBH and RGM are calling her at her work as well as her parents. The only solution for Casey and the problems is to take the help of the Fair Debt Collection Practices Act [FDCPA]. The Federal Fair Debt Collection Practices Act was implemented in 1977. Prior to that, collection agencies often used nasty practices to get the money from the consumer who had taken a loan or credit. The FDCPA prohibits the making of abusive calls or unfair means to collect debts. Since GBH and RGM are acting as the collecting agency themselves, they have certain legal restrictions when they try to coordinate with Casey. The Federal Fair Debt Collection Practices Act covers debts such as family debts, household debts and personal debts. Since the purchase of the TV and oven falls under these categories, Casey definitely qualifies in seeking claims for the harassment meted out by the companies GBH and RGM. The Federal Fair Debt Collection Practices Act clearly states that all calls made to the customer should be between 8 AM and 9 PM. Secondly, collectors are not allowed to call repeatedly. In case of Casey, the callers have called repeatedly, once to her mother and the other time to her father. It’s also clearly stated in the Federal Fair Debt Collection Practices Act that the collectors cannot harass Casey by name calling. When Casey had called up one of the collection companies, they had called her names. Moreover, they had continuously harassed her by sending threatening letters in which it was stated that she’d be jailed if she didn’t pay within thirty days. She also received a threatening letter from GBH which mentioned that she’d lose her house if she didn’t pay. These two letters by GBH and RGM qualifies as harassment. What’s more, the companies also called up her family, which is once again prohibited by the Federal Fair Debt Collection Practices Act. The section 803 [5] also states that the family cannot be contacted for any purpose other than finding out the contact details of the debtor. The companies not only did call Casey’s parents, they also made insulting remarks about their daughter. The collecting agency can tell no one except the debtor or the attorney of the debtor about the dues and payments. Since they have violated section 806, related to harassment or abuse in the FDCPA, Casey can definitely make claims and ask for damages. Section 808 of the Federal Fair Debt Collection Practices Act also states that a threat by the debt collector of taking possession of the debtor’s property or disablement of property is a violation and falls under unfair practices. The letter sent by GBH is therefore a proof that Casey’s rights as a debtor has been violated by GBH. RGM has violated the section 807, subsection 4 of the Federal Fair Debt Collection Practices Act as well. The section deals with false or misleading representations. Since RGM had written to Casey that the sheriff would put her in jail if she was unable to pay within 30 days, which was a misleading statement, they have violated the law. Section 813 pertaining to civil liability clarifies the liability of the collection agencies, in case they violate any of the guidelines of the FDCPA. The penalties for FDCPA violation are steep. In comparison to the amount of money due for paying off the TV and oven charges, the companies may have to pay more than $1,000 in statutory damages. Casey has to sue GBH and RGM within one year from the date of law violation, in order to get paid for the damages if Casey wins the case. Under subsection (a) (2) (B), of the Federal Fair Debt Collection Practices Act, the persistent noncompliance by the collector of debt can lead to penalties. In addition, the attorney fees which are being currently paid by Casey can also be recovered through the debt collectors. Casey can also contact the Federal Trade Commission for further help on recovering damages from GBH and RGM companies. Moreover, Casey can even recover one percent of the debt collector's net worth or up to $500,000 [whichever is less] for the mental and economic damages caused to her. Question C Toyota Motors have lately been the subject of many legal debates in the US. There have been several complaints made by customers around the US about the faulty car parts of Toyota, especially its faulty gas pedals. Just like the several families who have been harmed by Toyota’s faulty vehicles, Bob and his sister were harmed, both physically and mentally. Mary met an accident because of the unintended acceleration problem with their new Toyota car. A new bill has been passed by the US government called the Motor Vehicle Safety Act of 2010. The bill focuses on the brake override systems of all the new car models which are manufactured and sold in the US. The bill has recently been converted into a law in June 2010, but a number of automakers are opposing the Act. The Motor Vehicle Safety Act of 2010 (H.R. 5381) is also known as the Toyota bill. The Act specially addresses the requirement of all Toyota cars for providing brake override systems as well as event data recorders. It has been reported that the sticky pedal issue in Toyota cars causes most of the accidents in the Toyota cars. Since it is evident that the brake override systems were not present when Mary was driving, Mary and Bob can claim and recover substantial amount of money for damages caused to them. In case of Mary, the damages would include the physical damages caused to her because of her broken ribs, leg fractures and head injuries. The mental trauma which prevents her from working efficiently would also count as a mental and psychological damage caused directly by the faulty gas pedals of Toyota. As regards Bob, the damages would include the $2000 less, which he received when he sold the car, only because of the bad reputation of his car. The stress caused because of losing $2000 and his sister’s accident, had impacted his work too. This had compelled his boss to warn him. Apart from the Motor Vehicle Safety Act of 2010, Bob can also seek remedies for damage through the Lemon Laws. The Lemon Law states that the defect in a good which has caused economic, physical and mental loss is a major defect. This defect should impair the vehicle’s safety, value and use as well. In case of Bob and Mary, safety was definitely impaired, since it led to a major accident. The value of the car was impaired too, since Bob lost $200 because of the reduced value of the car. Bob can also seek claims through the Consumer Product Safety Commission or the CPSC. Consumer Product Safety Commission is a regulatory federal agency which is an independent body. It was created to protect the US citizens from the risks and unreasonable injuries caused by more than 15,000 types of consumer products. Additionally, the Defective Product Law or the product liability law is the law pertaining to the liability of the manufacturing parties in paying for the damages caused by a certain defect in their product. The Toyota gas pedal definitely falls under the laws of the Defective Product Law. The CPSC often uses several strategies to bring awareness of the customers on the potential risks. They can create media coverage on TV and radio channels, websites or print media such as newspapers ad publications. Media coverage can immensely help Bob in garnering public support for his case. Bob can presently utilize the U.S. auto safety law called the National Traffic and Motor Vehicle Safety Act too. Many customers of Toyota have filed lawsuits against the company with the help of the National Traffic and Motor Vehicle Safety Act. In this year alone, there have been more than 70 lawsuits against Toyota which specifically deals with the gas pedal issue. Bob has a fair chance of recovering damages caused to him and his sister, in terms of the physical and economic harm as well as the drop in the resale value of the car. The plaintiff can also target the Crashworthiness aspect of the law, which basically states that people are investing more than money on their vehicle. They invest their lives and emotions on it also. Hence, it is the essential for the vehicle manufacturers to ensure that the vehicle would prevent or mitigate any major injuries to the passengers of the vehicle. Sudden or unintended acceleration is yet another aspect of the law which Bob can use, for recovering damages caused to Mary and Bob. Hence, Bob requires an attorney who can properly guide him. Since the case requires Bob and Mary to utilize aspects from laws such as the National Traffic and Motor Vehicle Safety Act, the Defective Product Law, Consumer Product Safety Commission, the Motor Vehicle Safety Act of 2010, sudden or unintended acceleration as well as the crashworthiness aspect of the law, an expert lawyer would be a good choice for guiding them when they try to sue Toyota. If they win the lawsuit, they would recover damages from the economic perspective and also a substantial amount from the perspective of physical and mental anguish caused by Toyota. References Consumer Product Safety Commission of 1972 (1972) Fair Debt Collection Practices Act of 1978 (1978) Motor Vehicle Safety Act of 2010 (2010) National Traffic and Motor Vehicle Safety Act of 1966 (1966) Texas Deceptive Trade Practices Act of 1973 (1973) Read More