Unfair business practices encompass fraud, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers and are prohibited by law in many countries. For instance, in the European Union, each member state must regulate unfair business practices in accordance with the Unfair Commercial Practices Directive, subject to transitional periods. Unfair business practices may arise in many areas, including:
- Tenancy matters
- Matters involving the purchase of products and services by consumers
- Matters involving insurance claims and the settlement thereof
- Debt collection in cases of default
In addition to providing for the award of compensatory damages, laws may also provide for the award of punitive damages as well as the payment of the plaintiff's legal fees.
At common law, individuals were not entitled to attorneys fees or punitive damages for wrongful acts committed by businesses in most states. Most often, laws prohibiting unfair business practices require consumers to send demand letter to the business prior to commencing with a law suit. If the business fails to make a reasonable offer of settlement within a specified period of time, and is subsequently found liable in court, it may be liable for punitive damages and the injured parties reasonable attorney's fees under many statutes. In some instances, the statutes provide for prevailing plaintiffs to recover double or triple the actual damages against non-settling defendants.
When statutes prohibiting unfair and deceptive business practices provide for the award of punitive damages and attorneys fees to injured parties, they provide a powerful incentive for businesses to resolve the claim through the settlement process rather than risk a more costly judgment in court.
Famous quotes containing the words unfair, business and/or practices:
“I was so sick and faint, so overcome at the brutality of this fiendish sport, that I hardly heard the shouts of “Bravo! bravo!” and the fanfaronade of trumpets.... I do not know which astonished me the most, the strikingly curious, brilliant coup d’oeil, the dexterity of the men, the intrepidity of the animals, the miserable unfair play, or the pleasure of the spectators.”
—M. E. W. Sherwood (1826–1903)
“I’m not in business to be loved, but I am in business.”
—Robert Towne (b. 1936)
“Of all reformers Mr. Sentiment is the most powerful. It is incredible the number of evil practices he has put down: it is to be feared he will soon lack subjects, and that when he has made the working classes comfortable, and got bitter beer into proper-sized pint bottles, there will be nothing left for him to do.”
—Anthony Trollope (1815–1882)