Canned Answers: Consumer Protection (Todd)
DTPA basics: Consumer, Goods / Services, Seller
For a cause of action to arise under the DTPA, several basic components must be met. First,
there must be a consumer, goods or services, and a seller (17.45). Second, a transaction that was
a producing cause of harm must have occurred, which includes any of the following: a seller
must have committed a fraudulent or deceptive act from the laundry list upon which the
consumer relied, breached an express or implied warranty, committed an unconscionable act, or
violated a specific provision of the Insurance Code (17.50(b)).
A consumer is one who seeks or acquires goods or services for purchase or lease, and he can be
an individual, business, or agency of the state. The actual exchange of money is not required,
only the present intent and capacity to acquire the good or service (Kennedy, Lou Poliquin).
Limits of consumer status include businesses of over 25 million dollars in gross assets (burden
on D to prove) (Eckman), and incidental beneficiaries of a good or service are also excluded
(Chamrad). If there is no consumer, there is no case. Here, there is (not) a consumer….
The next factor is whether a good or service undergirds the transaction. Goods include tangible
chattels and real property, while services include work or labor, including repairs. In some ways,
these concepts are broad.
For example, purchase of an interest or share in a tangible good, like a
herd of cattle or real estate, is purchase of that good (MBank, Hennessey). Further, although a
seeming limitation on goods and services is that they must be purchased or leased “for use,” this
includes any use to which the goods or services are intended, such as for resale (Hennessey).
Services tend to be limited, however; a service that is merely incidental to a transaction, such as
selling a lottery ticket but doing so incorrectly, is not actionable (Circle K). In fact, if a statute
provides for a due diligence defense, then advice that is incidental to a transaction is also
excluded (E.F. Hutton). Although money is neither a good nor a service (Riverside), if a bank
charges a service fee, then the bank is subject to the DTPA (Ferguson). Further, if a good or
service is the underlying object of a financial transaction, then a creditor or lender becomes
inextricably intertwined with the good, making him subject to the Act (Flenniken, International
Harvester). Here, a good / service exists because ….
Finally, there must be somebody to sue: a seller, or sometimes a lender. The DTPA does not
define seller, so this determination is fact-specific. We start with this proposition: the consumer’s
status is established by his relationship to the transaction, not the seller (Terrell & Garrett). Thus,
if one sells or attempts to sell a good or service to a consumer in violation of the act, he comes
under the ambit of the Act. This includes salesmen as well as individuals who sell something
even once (Pennington). But many exceptions and nuances apply. For example, the agent of a