Opinion ID: 854141
Heading Depth: 2
Heading Rank: 1

Heading: Intent to Defraud or Mislead under the Act

Text: We agree with the State that the language and structure of the Act do not require intent as an element of every deceptive act. The stated purpose of the Act is to protect consumers from suppliers who commit deceptive and unconscionable sales acts and to encourage the development of fair consumer sales practices. §§ 1(b)(2) & 1(b)(3). The Act gives consumers and the attorney general the power to sue suppliers who engage in deceptive acts. See § 4. In very general terms, [4] the structure of the Act is that if a good or service turns out to be other than as represented, the consumer may invoke the Act by giving notice of the problem to the supplier. The supplier then has thirty days to offer to fix it. If a cure is accomplished in a reasonable time that is the end of the matter. However, if either the defect is intentional, or the supplier does not supply goods or services conforming to the representations, the consumer has a claim under the Act and may recover attorneys fees among other remedies. In addition, even if no consumer sues, the State may sue under the Act for injunctive relief and, if the acts are intentional, for civil penalties. §§ 4(c), 4(g), & 8. The mechanics of this scheme are spelled out through several defined terms. Specifically, the Act provides for two kinds of actionable deceptive acts: uncured deceptive acts and incurable deceptive acts. [5] An uncured deceptive act means a deceptive act... with respect to which a consumer who has been damaged by such act has given notice to the supplier, but the supplier either fails to offer to cure within thirty days or does offer to cure but fails to cure within a reasonable time after the consumer accepts the offer. § 2(6). An incurable deceptive act means a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead. § 2(7). Intent to defraud or mislead is thus clearly an element of an incurable deceptive act. But just as clearly intent is not essential to every deceptive act. If it were, every deceptive act would be incurable because virtually any intentional misleading would qualify as a scheme, artifice or device. This would plainly obliterate the statutory purpose to permit cure without resort to the courts for large numbers of acts that, if uncured, become the basis for a suit under the Act. This conclusion is borne out by an analysis of the remaining provisions of the Act. Section 3(a) of the Act defines deceptive act. As of 1985, of the twelve deceptive acts listed at that time, ten defined the required mental state as what the supplier knows or should reasonably know, or similar language. [6] Accordingly, for example, a supplier commits a deceptive act under § 3(a)(1) if the supplier represents that a product in a consumer transaction has characteristics the supplier should reasonably know it does not have. Should reasonably know is plainly a lesser standard than knowingly violate or intend to mislead. Under the explicit language of the statute, however, it is sufficient to constitute a deceptive act under § 3(a)(1) and several other subsections of § 3(a). This conclusion is further supported by the fact that the Act provides for two affirmative defenses, either of which would be superfluous if intent were an element of every deceptive act. Section 3(c) provides that if a supplier can show by a preponderance of the evidence that an act resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error, then the act is not deceptive. Section 3(d) provides a defense if the act was made in good faith without knowledge of its falsity in reliance upon certain representations made by others. For either defense to be meaningful, some acts must be deceptive and therefore actionable even if unintentional or unknowing. Spaulding v. International Bakers Servs., Inc., 550 N.E.2d 307, 309 (Ind.1990) (Where possible, every word must be given effect and meaning, and no part is to be held meaningless if it can be reconciled with the rest of the statute.).