Unfair and Deceptive Trade Practices and Consumer Protection: A History and State Law Distinctions

Federation of Defense and Corporate Counsel Insights

Authored Article

I. History and Development of Federal and State Consumer Protection Acts

A. Federal protection

Prior to the implementation of consumer protection acts in the U.S., theories of freedom of contract and caveat emptor – “let the buyer beware” – controlled the merchant-consumer relationship. Spencer Webber Waller et al., Consumer Protection in the United States: An Overview, 4 EUR. J. CONSUMER L. 803 (2011). The economic boom in the early- and mid-twentieth century brought with it many new products and innovations, creating the need for a means to remedy breaches in the merchantconsumer relationship. Joanna M. Shepherd-Bailey, Consumer Protection Acts or Consumer Litigation Acts? A Historical and Empirical Examination of State CPAs, AMERICAN TORT REFORM FOUNDATION, www.atra.org. At that time, consumers’ recourse options were limited to suing merchants either for breach of contract or, more commonly, for the common-law tort of deceit (today’s fraud). Id. However, fraud claims presented challenges for consumers who were often unable to prove an objective and deliberate false statement or who had insufficient damages to warrant the expense of a lawsuit. Id.

This article first appeared in Federation of Defense and Corporate Counsel Insights in December 2015.