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1 min read

Does the Oregon SCA Apply to Commercial Transactions?


In a legal dispute between TruNorth Warranty Plans of North America, LLC and the Department of Consumer and Business Services (DCBS), the question of whether the Oregon Service Contract Act (OSCA) applies to contracts involving commercial transactions between businesses was a central issue. The court's decision affirmed that the OSCA does indeed have jurisdiction over such contracts, providing important clarity in this matter.

Analysis of the OSCA's Definition of a “Service Contract”

The court's ruling was based on a careful examination and consideration of the OSCA's definition of a "service contract." The absence of any explicit limitation on the types of parties or "property" covered by the OSCA played a significant role in the court's decision. This means that the OSCA applies to both individual and commercial consumers, debunking the argument that the term "consumer" only refers to individuals engaged in transactions for personal, family, or household purposes.

To support its conclusion, the court also reviewed the legislative history of the OSCA. While the primary objective of the law was originally to protect individual consumers, there was no evidence suggesting an intention to exclude commercial transactions between businesses from its scope. This further fortified the court's affirmation of the OSCA's applicability to commercial transactions, emphasizing that it imposes obligations and provides protections even in business-to-business dealings.

During the court proceedings, a key point of contention was the level of deference that should be given to the agency's interpretation of the law. The court clarified that unless there are delegative qualities in statutory terms, an agency's interpretation does not automatically receive deference. Instead, the court relies on the clear and explicit definitions provided by the legislature and consults relevant dictionaries from the time the law was enacted to gain a comprehensive understanding of its intended meaning.

In summary, the court's decision supports and upholds the ALJ's ruling, solidifying the OSCA's applicability to contracts involving commercial transactions between businesses. It dispels any doubts regarding whether the OSCA extends its protections to commercial consumers and highlights the law's inclusive nature in safeguarding the rights and interests of all parties involved in service contract agreements.