Unfair business practices
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United States situation
Most states in the United States have passed laws giving individuals and businesses a right to sue in court for unfair and deceptive business practices. In many instances, where a business engages in fraud, misrepresentation, oppressive or unconscionable acts or practices, individuals can file suit under statutes prohibiting unfair and deceptive business practices.
Statutes
These statutes have been applied to the landlord-tenant relationship, consumer purchases of goods and services, insurance claims settlement practices, debt collection practices and many other areas of business. In addition to providing for the award of compensatory damages, these laws frequently provide for the award of punitive damages and attorney's fees to prevailing plaintiffs.
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 treble 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.