Massachusetts Business Attorney · Business Law
Most people know Chapter 93A for one thing: double or triple damages. But a court can also order a business to stop doing something or to unwind a deal. Contract terms can shape, and sometimes limit, what a party can recover. And when the defendant is an insurance company, a separate statute, Chapter 176D, changes who can sue and how large the damages can get.
This article covers those three topics. For the basics, see our articles on what makes a business practice unfair or deceptive under Chapter 93A, how multiple damages work, and defenses to Chapter 93A claims.
Part 1: When money is not the right remedy
The court’s equitable power under §§ 9 and 11
Both private-action sections of Chapter 93A allow more than a damages award. Section 9, which covers consumers and others who are not suing as a business, allows an action for damages and “such equitable relief, including an injunction, as the court deems to be necessary and proper.” Section 11, which covers a business suing another business, uses the same language.
That wording gives the court a flexible set of tools. In Slaney v. Westwood Auto, Inc. (1975), the Supreme Judicial Court (SJC) considered an early § 9 case in which a car buyer sought damages and rescission of the sale. The court noted that because § 9, as then written, directed suit “in equity,” it was “no objection” that the plaintiff also had an adequate remedy at law. The practical lesson is that the statute itself authorizes equitable relief alongside damages; a 93A plaintiff is not limited to asking for money.
Injunctions
An injunction is a court order requiring someone to stop doing something, or sometimes to do something, such as stopping a misleading advertising practice or the use of a deceptive contract term.
Section 11 has an important feature. Ordinarily, a business must show a “loss of money or property” to sue under § 11. But the statute separately provides that a business that has not yet suffered such a loss may still obtain an injunction if it can show that the unfair or deceptive conduct “may have the effect of causing such loss of money or property.” A business can go to court to stop the conduct before the damage is done. Expect the court to want concrete evidence of the practice and of the threatened harm.
Rescission: unwinding the deal
Rescission means undoing a transaction: the contract is set aside, and each side returns what it received, as nearly as possible. Chapter 93A does not list rescission by name. But it fits within the “equitable relief … as the court deems to be necessary and proper” language of §§ 9 and 11, and plaintiffs can ask for it. The Slaney case itself was a buyer’s request to rescind a car sale and recover expenses.
Rescission makes the most sense when a party was induced into a contract by deception and would rather get out of the deal than keep it and collect damages. It raises practical questions: can the parties actually be put back where they started, and what happens to payments made, work done, or property that has changed hands? A party seeking rescission should be ready to answer them.
Part 2: Can you contract around Chapter 93A?
Businesses often ask whether a well-drafted contract can limit 93A exposure. The answer depends heavily on who the parties are and what kind of conduct is involved.
Business-to-business contracts: limitation-of-liability clauses
The starting point is Canal Electric Co. v. Westinghouse Electric Corp. (1990). The SJC held that a business could waive its § 11 claim by agreeing to a limitation-of-liability clause in that case. The court explained that a statutory right may be waived when the waiver would not frustrate the statute’s public policies, and it described the clause before it as a reasonable accommodation between two “commercially sophisticated” parties.
That rule has an important limit. In H1 Lincoln, Inc. v. South Washington Street, LLC (2022), a commercial lease dispute, the SJC held that a limitation-of-liability provision will not be enforced to protect a defendant who willfully or knowingly engages in unfair or deceptive conduct. The court reasoned that allowing a party to immunize itself in advance from liability for that kind of conduct would undermine the public policy behind the statute. The court also declined to follow a line of Appeals Court decisions that had turned on whether a 93A claim looked more like a contract claim or a tort claim.
So a negotiated cap between sophisticated businesses can still matter where the violation was not willful or knowing, but it will not shield willful or knowing misconduct. Because that question is often disputed until trial, a business should not assume a cap settles its 93A exposure in advance. For more on what to look for before you sign, see our contractor-focused contract review guide.
Consumer contracts are different
Canal Electric and H1 Lincoln were business-to-business cases under § 11. In Canal Electric, the SJC drew the contrast itself, stating that it “ordinarily would not effectuate a consumer’s waiver of rights under c. 93A.” A business that sells to consumers should not expect a waiver or liability cap in its standard terms to limit a consumer’s 93A claim the way a negotiated clause might between two companies.
Arbitration of 93A claims
Arbitration clauses do not eliminate a 93A claim; they change where it is decided. For decades, Massachusetts followed Hannon v. Original Gunite Aquatech Pools, Inc. (1982), which held that a consumer could not be compelled to arbitrate a § 9 claim even after signing a valid arbitration agreement. In McInnes v. LPL Financial, LLC (2013), the SJC held that § 9 claims must be sent to arbitration where the contract involves interstate commerce and the arbitration agreement is enforceable under the Federal Arbitration Act (FAA). The court explained that even if Massachusetts law barred compelled arbitration of § 9 claims, that rule would be displaced by the FAA for any agreement the FAA governs.
Whether a particular clause is enforceable still depends on the agreement itself: whether it was validly formed, what claims it covers, and whether a general contract defense applies. The FAA preserves generally applicable contract defenses, but not rules that single out arbitration.
Class-action waivers
Section 9 allows class actions, and many consumer arbitration agreements waive them. Two United States Supreme Court decisions control how those waivers are treated:
- In AT&T Mobility LLC v. Concepcion (2011), the Court held that the FAA preempted a California rule that had treated many consumer class-arbitration waivers as unconscionable.
- In American Express Co. v. Italian Colors Restaurant (2013), the Court held that a class-arbitration waiver is enforceable under the FAA even when the cost of individually arbitrating a federal statutory claim exceeds the potential recovery.
The SJC applied these decisions to a 93A class action in Feeney v. Dell Inc. (2013). After Italian Colors, the court held that the class waiver in Dell’s arbitration agreement could not be invalidated on the ground that it effectively denied the plaintiffs a remedy. The court expressly took no view on other possible grounds for challenging the agreement.
Part 3: When an insurer plays unfair: the Chapter 176D connection
What Chapter 176D prohibits
G.L. c. 176D, § 3(9) lists “unfair claim settlement practices” by insurers. The list includes, among others:
- misrepresenting pertinent facts or policy provisions relating to coverages at issue (§ 3(9)(a));
- refusing to pay claims without conducting a reasonable investigation based on all available information (§ 3(9)(d));
- failing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear (§ 3(9)(f));
- compelling insureds to sue by offering substantially less than the amounts ultimately recovered (§ 3(9)(g)); and
- failing to promptly provide a reasonable explanation of the basis for denying a claim or offering a compromise settlement (§ 3(9)(n)).
Who can sue: § 9 versus § 11
Section 9 claimants. Section 9 expressly allows suit by “any person whose rights are affected by another person violating the provisions of clause (9) of section three of chapter one hundred and seventy-six D.” In Polaroid Corp. v. Travelers Indemnity Co. (1993), the SJC confirmed that a claimant under § 9 may recover for violations of c. 176D, § 3(9) without separately proving that the conduct was unfair or deceptive under 93A, § 2, because § 9 says so explicitly. That can include an injured person pursuing a claim against someone else’s insurer. The plaintiffs in Rhodes v. AIG Domestic Claims, Inc. (2012), discussed below, were a family who had won a tort judgment against the insurer’s insureds.
Business claimants under § 11. A business suing its own insurer as a party engaged in trade or commerce is in a different position. In Polaroid, the SJC held that § 11 “does not grant an independent right to recover” for violations of c. 176D, § 3(9). A business proceeding under § 11 must show that the insurer’s conduct was itself an unfair or deceptive act or practice under 93A, § 2. The 176D list is still relevant to that inquiry, but a 176D violation does not automatically establish § 11 liability. The SJC also said in Polaroid that where an insurer could reasonably have concluded there was no coverage, its refusal to defend, even if later found wrong, does not support a 93A claim.
Remember, too, that a § 9 claim against an insurer generally requires a 30-day demand letter before suit, while § 11 does not. See our articles on responding to a Chapter 93A demand letter and Chapter 93A demand letters when a business sues a business.
Multiple damages measured on the underlying judgment
Before 1989, the damages for an insurer’s failure to settle promptly were usually measured by what that failure directly cost the claimant, typically the lost use of money during the delay. In 1989, the Legislature amended §§ 9 and 11 (St. 1989, c. 580). Both sections now provide that, for purposes of multiple damages, the amount of actual damages to be multiplied “shall be the amount of the judgment on all claims arising out of the same and underlying transaction or occurrence, regardless of the existence or nonexistence of insurance coverage available in payment of the claim.”
Rhodes v. AIG Domestic Claims, Inc. (2012) shows how significant that language is. An injured woman and her family won a tort judgment of about $11.3 million against a truck driver and the companies connected to him. The trial judge found that the excess insurer’s claims administrator had willfully and knowingly violated c. 176D, § 3(9)(f) and Chapter 93A, including by failing to make a prompt, fair settlement offer after judgment entered. The trial judge and the Appeals Court measured damages by the family’s lost use of the money. The SJC disagreed. Applying the 1989 amendment, it held that the 93A damages had to be double the amount of the underlying tort judgment.
Two points are worth emphasizing. First, the multiplier applies only when the court finds a willful or knowing violation (or, under § 9, a bad-faith refusal to grant relief). A violation that is not willful or knowing is compensated by actual damages. Second, the “regardless of … insurance coverage” language means the base for multiplication is the judgment, not the policy limits. For how multiple damages work more generally, see can you really get 3x the damages in a 93A lawsuit?
Remedies and limits at a glance
- Injunction: available under § 9 and § 11; under § 11, a business may seek one before suffering a loss if the conduct may cause a loss of money or property.
- Limitation-of-liability clauses: may be enforced between sophisticated businesses, but not to protect willful or knowing violations (H1 Lincoln).
- Arbitration and class waivers: § 9 claims must be arbitrated under an FAA-governed agreement (McInnes), and class waivers in those agreements are generally enforced (Feeney).
- 176D claims: directly actionable under § 9; under § 11, the conduct must be unfair or deceptive under § 2 (Polaroid).
- Multiplied damages against insurers: measured on the underlying judgment when the violation is willful or knowing (Rhodes).
Frequently asked questions
Can a business get an injunction under Chapter 93A before it has lost any money?
Yes, in some circumstances. Section 11 allows a business that has not suffered a loss of money or property to obtain an injunction if it can show that the unfair or deceptive conduct may have the effect of causing such a loss.
Will a limitation-of-liability clause cap my Chapter 93A exposure?
It may in a business-to-business contract for conduct that is not willful or knowing. Under H1 Lincoln, Inc. v. South Washington Street, LLC (2022), the SJC will not enforce such a clause to protect a defendant who willfully or knowingly engaged in unfair or deceptive conduct.
Can a business sue its own insurer under Chapter 93A for violating Chapter 176D?
A business suing under § 11 cannot rely on a Chapter 176D violation alone. Under Polaroid Corp. v. Travelers Indemnity Co. (1993), it must show that the insurer’s conduct was unfair or deceptive under Chapter 93A, § 2.
Getting help with a Chapter 93A remedy or contract question
Whether you are drafting a contract, facing a competitor’s unfair conduct, or dealing with an insurer that will not settle, these remedies and limits can change the strategy. To discuss your situation, see our Massachusetts business law services or contact our office at 978-273-8337.
About the Author
Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises businesses and individuals on collections, Chapter 93A claims and commercial disputes. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.
ABOUT THIS ARTICLE
This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.
