When a business or individual engages in behavior that is designed to mislead others about the qualities of a product in order to get them to purchase it, the activity is called a deceptive trade practice. Federal law provides a uniform law that applies to such activities in all states, and the practices are also prohibited under state law.
The Uniform Deceptive Trade Practices Act, or UDTPA, is the federal law that addresses deceptive actions. The act prohibits businesses and individuals from making deceptive representations about a product. An example of a covered activity would be odometer tampering, but the act covers all misrepresentations made to induce a sale.
When a business has engaged in a deceptive trade practice, it may be difficult to determine which person is responsible for it. Remedies that are used against businesses often include injunctions that prohibit continued deceptive practices and the assessment of fines and damages. When a specific individual can be pinpointed as being behind the deceptive trade practice, they may also be subjected to imprisonment.
Business litigation sometimes involves allegations of deceptive trade practices being employed, especially if the products received by a business are not what the business believed they were represented to be. In some cases, such disputes can be resolved without necessitating court litigation, while in others, litigation will be necessary. Businesses can avoid many disputes by drafting and using thorough and legally sound contracts. Some businesses also choose to include arbitration clauses in their contracts to avoid litigation and to provide for quick resolution in the event a dispute arises. Business owners may want to consult a business and commercial law attorney, as an attorney may be able to provide guidance regarding contracts. They may also litigate on behalf of their client in the event of a dispute.
Source: FindLaw, “Details on State Deceptive Trade Practices,” Accessed March 25, 2015