The California Unfair Business Practices Statute

Previously on our blog, we discussed the California statute that protects consumers and business competitors from unfair business practices. In today’s entry, we will further parse out what exactly constitutes an “unfair business practice.”

As mentioned before, section 17200 of the California Business and Professions Code states that “unfair competition” includes any unlawful, unfair or fraudulent business act or practice. The key to knowing whether you have a case under the statute is understanding what type of activity is unfair, unlawful, and/or fraudulent.

Unfair

In general, an unfair business practice is one that could potentially deceive the public.  Courts do not have a general license to review the fairness of contracts, but may enjoin deceptive or especially harsh business practices.  Whether or not a particular business practice is unfair will depend largely on the facts of the case.

Unlawful

An unlawful practice is one that violates a statute, rule, or regulation.  The statute, rule, or regulation can be anything from a violation of an obscure federal regulation to a violation of a local city ordinance. This means that even if a plaintiff lacks a private cause of action for a violation of the underlying business law, he/she/it can still bring an unfair competition claim.

Fraudulent

The standard for fraudulent conduct under section 17200 is lower than the traditional common law standard and requires only a showing that members of the public are likely to be deceived.  There does not need to be proof of actual deception, reasonable reliance, or actual damages.

Importantly, under California law a plaintiff does not need to prove all three prongs of the statute (unfair, unlawful, and fraudulent). Rather, the business practice only needs to meet any one of the three prongs in order for the plaintiff to be able to state a claim under section 17200.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

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