Can a Business Sue Under the Texas Deceptive Trade Practices Act?

A business can be a consumer

The Deceptive Trade Practices-Consumer Protection Act, subchapter E of chapter 17 of the Texas Business and Commerce Code, is usually thought of as a statute for individuals. Its text is broader. Section 17.45(4) defines "consumer" as an individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease any goods or services. A company that bought equipment, software, construction work, or a service contract is a consumer of those goods or services.

The definition then carves out one group: a "business consumer" that has assets of $25 million or more, or that is owned or controlled by a corporation or entity of that size. Section 17.45(10) defines a business consumer as one who acquires goods or services for commercial or business use. A closely held company below that size is inside the statute; a large corporation or a subsidiary of one is not.

The goods or services must be the basis of the complaint

Consumer status requires more than being a business that buys things. The plaintiff must have sought or acquired goods or services, and those goods or services must form the basis of the complaint. A company that was deceived in a transaction that did not involve buying or leasing anything, such as a pure loan, an investment, or the sale of its own products to a customer who did not pay, is generally not a consumer as to that transaction. Texas courts have held that the plaintiff need not have bought directly from the defendant, so a buyer can sue a manufacturer or a broker whose deceptive conduct reached the transaction, but the defendant's conduct must be connected to the consumer transaction itself.

The two exemptions that remove large deals

The Legislature added two exemptions in 1995 to keep the DTPA out of substantial commercial transactions between parties able to protect themselves. Both are in section 17.49.

The practical result: a mid-sized business deal documented by lawyers on both sides is usually outside the DTPA, and any deal above the higher threshold is outside it regardless of how it was negotiated. Smaller purchases, and larger ones made without independent counsel below the higher threshold, remain covered. "Total consideration" means what the consumer paid or agreed to pay for the whole project, not the amount in dispute, and a series of related transactions is aggregated.

A bill introduced in the 2025 legislative session would have rewritten these two subsections, but it was not enacted. As of 2026 the thresholds and conditions above remain the law.

Example

Suppose a Dallas logistics company buys a fleet-tracking system for a price just under the higher threshold, under a written contract its outside counsel negotiated. The vendor represented that the system integrated with the company's existing dispatch software; it does not, and the vendor knew it. The company is a consumer, it acquired goods and services, and the misrepresentation concerns them. But the contract was written, the price exceeds the lower threshold, and the company had its own lawyer. The section 17.49(f) exemption applies and the DTPA claim fails. The company's remedies are common-law fraud, breach of warranty and breach of contract. Had the same company bought the system on the vendor's standard order form without involving counsel, the DTPA claim would survive.

The professional services exemption

Section 17.49(c) excludes claims based on the rendering of a professional service, the essence of which is providing advice, judgment, opinion or similar professional skill. A business that received bad advice from its accountant, engineer or consultant cannot ordinarily sue under the DTPA for that advice. The exemption has exceptions that keep the DTPA available for an express misrepresentation of a material fact that cannot be characterized as advice, judgment or opinion; for a failure to disclose known information with intent to induce the transaction; for an unconscionable action that cannot be characterized as advice; and for breach of an express warranty that cannot be so characterized. A professional who lied about a fact, as opposed to giving a poor opinion, remains exposed.

What a business consumer can recover

Section 17.50 sets out the remedies for a consumer who proves that a listed deceptive act relied on to its detriment, a breach of warranty, or an unconscionable action was a producing cause of economic damages.

• Economic damages, defined in section 17.45(11) as compensatory damages for pecuniary loss, including costs of repair and replacement.
• Additional damages for knowing conduct. If the jury finds the defendant acted knowingly, meaning with actual awareness of the falsity or deception, it may award up to three times the economic damages, and mental anguish damages become available to an individual. If the conduct was intentional, up to three times the economic and mental anguish damages combined.
• Attorney's fees and costs. Section 17.50(d) provides that each consumer who prevails shall be awarded court costs and reasonable and necessary attorneys' fees. The award is mandatory, not discretionary, which is the DTPA's greatest practical advantage over common-law fraud.
• Injunctions and restoration of money or property acquired through the violation, and other relief the court deems proper.

The fee award runs the other way too. Under section 17.50(c), if the court finds the action was groundless in fact or law, brought in bad faith, or brought for harassment, it must award the defendant its fees and costs. Chapter 41 of the Civil Practice and Remedies Code does not apply to DTPA claims under section 17.50(g); the treble damages provision replaces exemplary damages, and a plaintiff who takes the multiplier may not also recover exemplary damages on a parallel common-law claim.

The 60-day notice and the two-year deadline

Section 17.505(a) requires a consumer, as a prerequisite to filing suit for damages, to give the defendant written notice at least 60 days before filing, stating the specific complaint in reasonable detail and the amount of economic damages, mental anguish damages and expenses, including attorney's fees. If suit is filed without it, the defendant may obtain an abatement until 60 days after proper notice is served. The notice may be skipped only where limitations is about to expire or the claim is a counterclaim. What the letter should say, and how a defendant should respond to one, is covered in the 60-day DTPA notice letter in Texas.

Section 17.565 requires DTPA suits to be filed within two years after the deceptive act occurred, or within two years after the consumer discovered or reasonably should have discovered it. The period may be extended by 180 days if the defendant knowingly engaged in conduct calculated to induce the consumer to delay filing. Two years is half the fraud period, so a business weighing both claims should calendar the DTPA deadline first; the comparison is in the deadline to sue for fraud or fiduciary breach.

DTPA or common-law fraud?

For a qualifying business, the DTPA is often the stronger claim. It does not require proof that the defendant knew the statement was false in order to recover economic damages (knowledge matters only for the multiplier), it carries a mandatory fee award, and its list of deceptive practices in section 17.46(b) covers conduct that might not meet every element of fraud. Its disadvantages are the exemptions, the notice requirement, the shorter deadline, and the risk of a fee award against a groundless claim. Common-law fraud has no size limits, a four-year period and access to exemplary damages, but no fee award and a knowledge requirement. Most business plaintiffs who qualify under the DTPA plead both and elect after the verdict. The fraud elements are set out in how to prove fraud in a Texas business dispute.

The defense side

A business that receives a DTPA notice letter should check the exemptions first. If the claimant is a business consumer over the asset limit, or the transaction falls within section 17.49(f) or (g), or the claim is really about professional advice, the DTPA count can be removed early. If none applies, the 60-day window is the time to evaluate a settlement tender, because the statute's settlement-offer provisions can limit the claimant's recovery of fees and additional damages when a reasonable offer is rejected. Tina Wysk represents businesses asserting and defending DTPA and fraud claims in Dallas state and federal courts.