                           UNPUBLISHED

UNITED STATES COURT OF APPEALS
                  FOR THE FOURTH CIRCUIT


BIG RED, LLC,                             
                   Plaintiff-Appellant,
                  v.
DAVINES S.P.A.,
                  Defendant-Appellee,              No. 01-1254
                  and
RAFFCO INTERNATIONAL BEAUTY
COMPANY, LIMITED,
                       Defendant.
                                          
            Appeal from the United States District Court
     for the Eastern District of North Carolina, at Wilmington.
                James C. Fox, Senior District Judge.
                          (CA-99-210-7-F)

                       Argued: September 25, 2001

                        Decided: March 21, 2002

      Before WILKINSON, Chief Judge, and WILKINS and
                 TRAXLER, Circuit Judges.



Affirmed by unpublished opinion. Judge Traxler wrote the majority
opinion, in which Chief Judge Wilkinson joined. Judge Wilkins wrote
a dissenting opinion.


                              COUNSEL

ARGUED: Gary Keith Shipman, SHIPMAN & ASSOCIATES,
L.L.P., Wilmington, North Carolina, for Appellant. Andrew Kent
2                      BIG RED v. DAVINES S.P.A.
McVey, MURCHISON, TAYLOR & GIBSON, L.L.P., Wilmington,
North Carolina, for Appellee.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                               OPINION

TRAXLER, Circuit Judge:

   Plaintiff Big Red, LLC, a North Carolina corporation engaged in
the business of distributing hair and beauty products, appeals the dis-
trict court’s dismissal under Fed. R. Civ. P. 12(b)(6) of its unfair trade
practices action, see N.C. Gen. Stat. § 75-1.1 (1999), against defen-
dant Davines, SpA, a manufacturer and distributor of skin and hair
care products headquartered in Parma, Italy. We affirm.

                                    I.

   This action arises out of negotiations between Big Red and Davines
which, according to Big Red, were intended to grant Big Red an
exclusive right to distribute Davines’ hair care products within desig-
nated territories of the United States, but which never culminated in
the execution of the written agreement required by North Carolina
law to render such an agreement enforceable. See N.C. Gen. Stat.
§ 75-4 (1999) ("No contract or agreement . . . limiting the rights of
any person to do business . . . shall be enforceable unless such agree-
ment is in writing [and] duly signed. . . .").

   On appeal, we review the district court’s Rule 12(b)(6) dismissal
de novo, see Flood v. New Hanover County, 125 F.3d 249, 251 (4th
Cir. 1997), assuming the facts alleged in the complaint are true and
viewing the complaint in the light most favorable to the plaintiff, see
Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). A
motion to dismiss for failure to state a claim for relief should not be
granted "unless it is clear that no relief could be granted under any
                      BIG RED v. DAVINES S.P.A.                        3
set of facts that could be proved consistent with the allegations." GE
Inv. Private Placement Partners II v. Parker, 247 F.3d 543, 548 (4th
Cir. 2001) (internal quotation marks omitted).

   According to the complaint, Davines, an Italian company, wanted
to further its long-term goal of promoting and distributing its beauty
products in the United States and Canada in early 1998. Big Red,
which distributed beauty products in the coastal regions of North Car-
olina and South Carolina, was approached by Susan Budman,
Davines’ recently hired Director of North American Operations,
about becoming the exclusive distributor of Davines’ products for the
southeastern United States. Negotiations ensued and included a trip
by Big Red representatives to Italy to tour Davines’ facility and to
discuss the possibility of such a relationship. According to Big Red,
these negotiations ultimately resulted in an oral agreement by
Davines to grant exclusive distribution rights to Big Red within a des-
ignated southeastern region, as well as an agreement by Davines to
devote resources towards advertising and developing the market for
Big Red. In response, Big Red placed an order for Davines’ products
in May 1998 and began efforts to develop the market for them. How-
ever, no written agreement for such an exclusive distributorship was
ever executed.

   In August 1998, Big Red became concerned about Davines’
alleged failure to move forward on its commitments under the
arrangement, and Big Red expressed its concerns to Davines. Big Red
continued, however, to devote substantial time and effort to the devel-
opment of a market for Davines’ products, placed a second order for
Davines’ products in November 1998, and began to explore with
Budman the possibility of creating "sub-distributors" in order to
achieve faster market penetration. In addition, and despite the contin-
ued absence of any written agreement granting Big Red an exclusive
distributorship in any territory, Big Red sold its distributorship rights
for other non-Davines’ beauty products.

   In January 1999, Davines first began exploring the idea of creating
"master distributors" in the United States and Canada. Master distrib-
utors would import Davines’ products at a reduced price, warehouse
them, and in turn distribute them to local or regional distributors for
market penetration. Budman began discussing the possibility of such
4                     BIG RED v. DAVINES S.P.A.
a distributorship with Big Red and, in March 1999, Big Red placed
a third order for Davines’ products. In April 1999, negotiations for a
master distribution agreement between Big Red and Davines began in
earnest, culminating in the preparation of a draft "Master Distribution
Agreement" and the scheduling of face-to-face meetings on June 2-3,
1999, to discuss the proposed agreement. In anticipation of finalizing
the material terms of the agreement, and in reliance upon representa-
tions made up to that point, Big Red alleges that it placed a fourth
order for Davines’ products on May 24, 1999, and that it leased ware-
house space to store Davines’ products. More specifically, Big Red
alleges that in reliance upon Davines’ representations and directions
during the negotiation process, it entered "into a long term lease for
space in Wilmington, North Carolina, in which to warehouse
Davines[’] product, and placed its first order, as a Master Distributor,
in the approximate amount of $250,000.00, which order was to be
delivered during the month of July, 1999." J.A. 19. However, no
"Master Distribution Agreement" had been executed at the time.

   On June 2, 1999, Big Red received a revised draft of the proposed
agreement and, as scheduled, representatives of Davines and Big Red
met on June 2 and June 3 to discuss the latest proposal. According to
Big Red, Davines and Big Red had agreed upon most of the terms of
the master distribution agreement by the end of the meeting on June
3, and "[t]he parties shook hands on the "‘deal,’" intending to finalize
it within the week. J.A. 18. But, as Big Red acknowledges, at least
one sticking point remained — the parties had been unable to agree
upon the applicable jurisdiction and governing law provisions in the
event disputes should arise under the proposed agreement. Big Red
demanded that the applicable jurisdiction and governing law be the
courts and law of the United States, whereas Davines demanded, and
the draft agreements reflected, that Italian law would apply and that
disputes would be resolved in the courts of Parma, Italy.

   Big Red alleges that shortly after the June 3, 1999 meeting, Bud-
man told Davines that it "would have to accede to Big Red’s . . . posi-
tion on [the] issue" of the choice of forum and choice of law
provisions, J.A. 18, prompting Davines to orally accede to Big Red’s
demand in this regard and to promise to provide a final written agree-
ment executed by Davines within approximately one week. Yet,
despite this alleged capitulation and the promise to send the final, exe-
                      BIG RED v. DAVINES S.P.A.                       5
cuted agreement within the week, no such final agreement was ever
executed by Davines or sent to Big Red. Instead, Big Red heard "ru-
mors" during an international trade show in Las Vegas on August 3,
1999 — two months later — that Davines was pursuing negotiations
for a master distributor agreement with Graham Webb International,
a large hair product manufacturer in the United States. J.A. 21.

   Big Red thereafter successfully arranged another meeting with
Davines’ representatives on August 11, 1999, in Wilmington, North
Carolina. According to the complaint, Davines’ representatives trav-
eled to Wilmington on that date "to inspect and approve the ware-
house space leased by Big Red" to warehouse Davines’ products, but
instead "attempted to steer Big Red towards becoming [a] distribu-
tor[ ] for Davines’ skin care products" only. J.A. 22. Big Red declined
this opportunity and informed Davines that Big Red "intended to
move forward with [its] obligations under the Master Distribution
Agreement." J.A. 22. Again, no such written or executed agreement
existed at the time.

   Rejected in its attempts to achieve the contractual relationship that
it desired, Big Red brought this action against Davines, alleging that
Davines had breached both a Regional Distribution Agreement and
Master Distribution Agreement with Big Red. In addition, Big Red
asserted causes of action for fraud, negligent misrepresentation, and
unfair and deceptive trade practices. Big Red sought actual, punitive,
and treble damages, as well as injunctive relief. Davines’ motion to
dismiss the complaint under Rule 12(b)(6) was granted in its entirety
by the district court, but Big Red now appeals only the district court’s
dismissal of its unfair and deceptive trade practices claim.

                                  II.

                                  A.

   We begin our analysis of Big Red’s unfair trade practices claim
with a brief discussion of the district court’s dismissal of Big Red’s
first two claims against Davines for alleged breaches of a Regional
Distribution Agreement and a Master Distribution Agreement, neither
of which had been reduced to writing.
6                      BIG RED v. DAVINES S.P.A.
    N.C. Gen. Stat. § 75-4 provides that:

      No contract or agreement hereafter made, limiting the rights
      of any person to do business anywhere in the State of North
      Carolina shall be enforceable unless such agreement is in
      writing duly signed by the party who agrees not to enter into
      any such business within such territory. . . .

It is well settled that this provision applies to an agreement affording
exclusive distribution rights to another. See Radio Elec. Co. v. Radio
Corp. of Am., 92 S.E.2d 664, 666-67 (N.C. 1956) ("[A] contract
whereby a person, firm or corporation is made exclusive distributor
for the State of North Carolina, precluding the manufacturer from
doing business in North Carolina otherwise than through this single
channel, is void unless the party so limited or restricted agrees thereto
in writing."); Norlin Indus., Inc. v. Music Arts, Inc., 313 S.E.2d 166,
169 (N.C. Ct. App. 1984) (holding that an "oral ‘franchise agreement’
in which the plaintiff allegedly gave [the defendant] an exclusive area
in which to sell [was] barred by the statute of frauds pursuant to G.S.
75-4").

   Big Red has never alleged that a Regional Distribution Agreement
or Master Distribution Agreement was reduced to writing and exe-
cuted by Davines. Accordingly, the purported oral "agreements,"
assuming they existed, were unenforceable, and the district court cor-
rectly dismissed Big Red’s breach of contract claims under this statute
of frauds. Big Red, for its part, has not appealed this rather clear-cut
adjudication of these claims, seemingly acknowledging that it has no
enforceable exclusive distributorship agreement with Davines at all,
and that it therefore cannot recover the contract-based damages origi-
nally sought in this lawsuit. Instead, Big Red now asserts that it can
nonetheless circumvent the statute of frauds (and achieve perhaps an
even better financial result) by pursuing an action for treble damages
under the North Carolina Unfair Trade Practices Act for losses it sus-
tained in reliance upon the alleged representations made by Davines
during the failed contract negotiations. We disagree.

  To state a claim for unfair trade practices under the North Carolina
Unfair Trade Practices Act, see N.C. Gen. Stat. § 75-1.1, Big Red
must allege and show "(1) that the defendant committed an unfair or
                      BIG RED v. DAVINES S.P.A.                      7
deceptive act or practice, or an unfair method of competition; (2) in
or affecting commerce; (3) which proximately cause[d] actual injury
to plaintiff." Slosman v. Sonopress, Inc., 557 S.E.2d 176, 181 (N.C.
Ct. App. 2001); see also Computer Decisions, Inc. v. Rouse Office
Mgmt. of North Carolina, Inc., 477 S.E.2d 262, 266 (N.C. Ct. App.
1996). The Act’s "protections extend to businesses in appropriate sit-
uations," Dalton v. Camp, 548 S.E.2d 704, 710 (N.C. 2001), but the
Act does not "apply to all wrongs in a business setting," id. at 711.
"A practice is unfair when it offends established public policy as well
as when the practice is immoral, unethical, oppressive, unscrupulous,
or substantially injurious to consumers." Marshall v. Miller, 276
S.E.2d 397, 403 (N.C. 1981). In the context of business contracts
(such as that attempted here), "[i]t is well established that a mere
breach of contract, even if intentional, is not sufficiently unfair or
deceptive to sustain an action" under Section 75-1.1. Computer Deci-
sions, 477 S.E.2d at 266. The plaintiff is required to allege and prove
that "substantial aggravating circumstances" attended the breach. Id.;
see also United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d
985, 992 (4th Cir. 1981). Indeed, in any context, some kind of "egre-
gious or aggravating circumstances must be alleged and proved
before the Act’s provisions may take effect." Dalton, 548 S.E.2d at
711 (internal quotation marks and alterations omitted).

   In this case, of course, there are no aggravating circumstances
accompanying a breach of contract, because there is no enforceable
contract at all. Big Red engaged in extensive negotiations with
Davines with the hope that it would become an exclusive master dis-
tributor for Davines’ products, and Big Red took actions in anticipa-
tion of closing the deal with Davines’ blessing. At one point, the
parties shook hands on the concept of the "deal," but even Big Red
does not assert that a complete deal existed at the time, and certainly
not a written one, as sticking points admittedly remained even at the
conclusion of the June meetings to discuss the sought-after relation-
ship. Instead of finalizing the deal with Big Red, as anticipated per-
haps by even both parties at the time, Davines instead chose to pursue
negotiations and reach a binding exclusive distributorship agreement
with another company.

   Therefore, Big Red’s unfair trade practices claim rests not upon
allegations of deceptive acts or practices that accompanied a breach
8                     BIG RED v. DAVINES S.P.A.
of an exclusive distributorship agreement, but upon allegations that
Davines, during the context of negotiations for an exclusive distribu-
torship agreement, committed an unfair or deceptive act or practice
by shaking hands on the "‘deal,’" J.A. 18, and "instruct[ing] Big Red
to proceed with the necessary arrangements to secure space to ware-
house Davines[’] products in the United States," J.A. 19. As previ-
ously noted, we assume these facts to be true, see Mylan Labs, 7 F.3d
at 1134, but "[t]he determination as to whether an act is unfair or
deceptive is a question of law for the court." Dalton, 548 S.E.2d at
711. For the reasons that follow, we are satisfied that Big Red’s alle-
gations fall far short of establishing the "immoral, unethical, oppres-
sive, unscrupulous," or otherwise egregious actions necessary to state
a claim for unfair and deceptive trade practices under North Carolina
law. Marshall, 276 S.E.2d at 403.

                                  B.

   To evaluate the sufficiency of Big Red’s allegations of unfair and
deceptive trade practices occurring during the contract negotiations
process, we begin with the particularly instructive opinion in Com-
puter Decisions, where the North Carolina Court of Appeals rejected
an unfair trade practices claim based upon a plaintiff’s similar reli-
ance upon representations made during negotiations for a contract that
also failed to result in a writing satisfying the applicable statute of
frauds. See Computer Decisions, 477 S.E.2d at 266.

   Computer Decisions sued a prospective landlord after their negotia-
tions for leasing office space fell through. During the course of nego-
tiating the lease agreement, which was also required to be in writing
to be binding under North Carolina law, the parties reached a verbal
agreement as to a number of the terms, but had not yet reduced the
agreement to a final writing. Computer Decisions, under a deadline
for moving, asked the prospective landlord "if they had a deal," and
the landlord, "aware that [Computer Decisions] had a deadline," affir-
matively responded that they indeed "‘ha[d] a deal.’" Id. at 264. Dur-
ing the course of what it perceived as final negotiations to reduce the
"deal" to writing, however, Computer Decisions learned that the land-
lord had been negotiating with another prospective tenant (with whom
the landlord ultimately consummated the requisite written agreement)
                       BIG RED v. DAVINES S.P.A.                         9
and, as a result, "Computer Decisions had to locate, lease, remodel
and move into new office space in 30 days." Id.

   Computer Decisions subsequently brought suit against the landlord,
alleging causes of action for breach of lease, fraud, negligent misrep-
resentation, and unfair and deceptive trade practices. The suit was dis-
missed by the trial court at the summary judgment stage, and the
North Carolina Court of Appeals affirmed. Pertinent to the unfair
trade practices claim, the Court of Appeals held that the prospective
landlord negotiating at arms-length with Computer Decisions had no
duty to inform Computer Decisions of its discussions with another
prospective tenant, see id. at 265-66, and that the landlord was "sim-
ply exercising [its] right to contract freely with whomever [it chose],"
id. at 266.

    The allegations in the instant case are strikingly similar. Big Red
seeks to hold Davines liable under the Unfair Trade Practices Act
based upon representations made by Davines during arms-length
negotiations that never resulted in a legally enforceable agreement,
but upon which Big Red relied. Big Red was obviously disappointed
by Davines’ decision not to execute a final contract for an exclusive
distributorship with it, but to pursue negotiations with another com-
pany instead, and Big Red was apparently harmed financially by its
ill-advised decision to enter into other agreements in anticipation that
the negotiations with Davines would ultimately be successful. But,
like the landlord in Computer Decisions, Davines was exercising its
"right to contract freely with whomever [it chose]" until the deal was
done, id. at 266, and Davines had no duty to disclose to Big Red its
intentions regarding the outstanding negotiations between them or
that it had chosen to entertain negotiations with another prospective
distributor, see id. at 265-66. See also Slosman, 557 S.E.2d at 182
(rejecting breach of contract, fraud and unfair trade practices claims
where negotiations between two sophisticated parties for a commer-
cial real estate lease, which the statute of frauds required to be in writ-
ing, fell through, even though defendant’s employees had represented
that a written lease would be executed and defendant had occupied
premises that plaintiff had arranged for the former tenant to vacate
early).
10                     BIG RED v. DAVINES S.P.A.
   With little means to distinguish Computer Decisions, Big Red
instead urges us to rely upon an earlier decision of the North Carolina
Court of Appeals in Process Components, Inc. v. Baltimore Aircoil
Co., 366 S.E.2d 907 (N.C. Ct. App.), aff’d, 374 S.E.2d 116 (N.C.
1988) (per curiam) (table), to reach an opposite result in this case.1
However, we view the facts in that case as distinguishable from those
before us today.

    In Process Components, the plaintiff agreed to an exclusive distri-
bution agreement with the defendant after the defendant represented
that its prior distributor was out of the subject market and that the
plaintiff would in fact be the exclusive distributor for the defendant
if the plaintiff agreed to the relationship. In reliance upon these repre-
sentations, the plaintiff leased warehouse space, began preparations
for a distributorship, and began holding itself out as a distributor. "A
written contract [evidencing the exclusive distributorship] was later
signed." Id. at 909. In actuality, the defendant was still bound by its
earlier distribution agreement. When conflicts arose between the two
"exclusive" distributors, the defendant breached its distribution agree-
ment with the plaintiff by terminating their relationship and honoring
the former. See id. at 366 S.E.2d at 911. The plaintiff then sued the
defendant for breach of contract and unfair trade practices.
  1
    With all due respect, we are unpersuaded by the argument that Com-
puter Decisions is distinguishable because there was no claim that the
defendant either made false statements or encouraged the plaintiff to rely
on the parties’ tentative agreement." In Computer Decisions, the defen-
dant affirmatively reassured Computer Decisions that "[w]e have a deal,"
knowing that Computer Decisions "had a deadline for moving," but
instead engaged in negotiations with another company for a deal to lease
the premises elsewhere. See Computer Decisions, 477 S.E.2d at 264. The
opinion also reflects that Computer Decisions was placed in a bind when
the deal fell through. See id. The opinion does not set forth all of Com-
puter Decisions’ specific allegations in detail, but given the fact that
Computer Decisions sued under the Unfair Trade Practice Act, we think
it fair to assume that Computer Decisions claimed that the landlord’s rep-
resentation was false and intended to encourage Computer Decisions to
rely upon the statement and not seek space elsewhere. Indeed, we see no
other way to read it.
                        BIG RED v. DAVINES S.P.A.                         11
   At trial, the jury found that the plaintiff and the defendant had an
exclusive distributorship contract and that the defendant breached the
contract. Based upon the jury’s finding that the defendant falsely rep-
resented that its prior distributorship agreement had been terminated
and that plaintiff could be its exclusive distributor, the trial court con-
cluded that the defendant’s conduct violated § 75-1.1 because it rose
to the level of an unfair or deceptive trade practice. On appeal, the
defendant asserted, inter alia, that the trial court erred in concluding
that its acts, as found by the jury, constituted unfair or deceptive acts
or practices under North Carolina law. The North Carolina Court of
Appeals disagreed, holding that the defendant’s false representations
regarding its ability to enter into the exclusive distributorship agree-
ment with the plaintiff were "unfair or deceptive acts or practices"
under the Act. Id. at 911.2

   Although the defendant’s false representations in Process Compo-
nents occurred in the context of contract negotiations for an exclusive
distributorship, little else places that case on a footing analogous to
the case before us. In Process Components, there was a binding,
enforceable contract between the parties, a breach of that contract,
and a finding that the defendant had engaged in misrepresentations
  2
    The case of Custom Molders, Inc. v. Roper Corp., 401 S.E.2d 96
(N.C. Ct. App.), aff’d, 410 S.E.2d 55, 55 (N.C. 1991) (per curiam)
(affirming "for the reasons stated in the concurring opinion"), is similar.
In Custom Molders, a manufacturer of plastic parts and adhesives, sued
the defendant, a manufacturer of lawn mowers, for breach of contract
and unfair and deceptive trade practices. The plaintiff alleged that the
defendant deceitfully induced the plaintiff to meet the defendant’s urgent
need for the design and manufacture of a plastic footrest pad — a process
that necessitated considerable up-front costs in time and money by the
plaintiff — by agreeing to buy all its requirements for footpads from the
plaintiff in the future so long as they were competitively priced. The fol-
lowing year, the defendant terminated the agreement without giving the
plaintiff an opportunity to meet a competitor’s lower bid, and the plain-
tiff sued. The court affirmed the jury’s award for breach of contract and
for unfair trade practices, but with regard to the latter on the narrow basis
that "there was evidence from which the jury could reasonably infer that
defendant represented to plaintiff that it would give plaintiff all of its
footpad business for the Craftsman mower, but never intended to abide
by that promise" when made. Id. at 101 (Wells, J. concurring).
12                    BIG RED v. DAVINES S.P.A.
sufficient to establish the egregious or aggravating circumstances nec-
essary to maintain a claim for unfair or deceptive acts or practices
under North Carolina precedent. In this case, in contrast, there are no
such allegations of unfair or deceptive conduct that induced Big Red
to enter into a contract with Davines that fell short of Big Red’s
expectations, or of deceptive representations or promises that were
made to induce Big Red to execute a contract that Davines never had
any intention of performing at the time. Rather, in a fashion more
analogous to that in Computer Decisions, Big Red’s unfair trade prac-
tices claim centers on allegations that it took actions in anticipation
that it would successfully negotiate a binding exclusive distribution
agreement with Davines, at least some of which were taken with
Davines’ explicit or implicit approval or direction, and that Big Red
was ultimately harmed by the failed negotiations.

   We are also unpersuaded by the argument that this case is never-
theless more closely aligned with Process Components than Com-
puter Decisions because the existence of an enforceable agreement
was wholly irrelevant to the Process Components court’s determina-
tion that the defendant’s acts constituted unfair or deceptive trade
practices. The question of "whether a particular act is unfair or decep-
tive depends on the facts surrounding the transaction and the impact
on the marketplace," Process Components, 366 S.E.2d at 910, and we
think it proper to consider that the plaintiff in Process Components
alleged that the unfair trade practices or acts attended the actual for-
mation and breach of an enforceable, written agreement. Simply
stated, in Process Components, the North Carolina Court of Appeals
was not presented with the question of whether a defendant’s false
representations, prematurely relied upon by the plaintiff to its detri-
ment, would have been sufficient to maintain an unfair trade practices
claim had the contract negotiations ultimately failed to result in an
enforceable, written agreement. But, in Computer Decisions, the
North Carolina Court of Appeals was called upon to address the ques-
tion of whether the defendant’s false representation — that it intended
to reduce an unenforceable oral contract into an enforceable contract
— made in the context of contract negotiations that did ultimately
fail, was sufficiently unfair or deceptive to maintain a claim under the
Unfair Trade Practices Act. The court concluded that it was not, and
we feel bound by this latter decision. See Computer Decisions, 477
S.E.2d at 266; see also Slosman, 557 S.E.2d at 182.
                       BIG RED v. DAVINES S.P.A.                       13
                                   C.

   To conclude, we are called upon to apply North Carolina precedent
in our quest to determine whether, as a matter of law, see Dalton, 548
S.E.2d at 711, the facts surrounding the alleged transactions and
negotiations, as alleged by Big Red, are fairly characterized as ones
which "offend[ ] established public policy" or are sufficiently "im-
moral, unethical, oppressive, [or] unscrupulous" as to be called unfair
or deceptive. Marshall, 276 S.E.2d at 403; see also Process Compo-
nents, 366 S.E.2d at 911. We believe, based upon controlling North
Carolina statutory laws and precedent, that they are not.

   First, the legislature of North Carolina has decided as a matter of
public policy that certain types of contracts are of such importance
that they must be in writing to be enforceable. See Varnell v. Henry
M. Milgrom, Inc., 337 S.E.2d 616, 619 (N.C. Ct. App. 1985) (recog-
nizing "[t]he consistent legislative policy [in North Carolina] that
business contracts be in writing to be effective"). No doubt this is
because the subject matters of these types of contracts predictably
generate substantial disagreements over the outcome of negotiations.
The writing requirement serves to eliminate arguments to the extent
practicable by demanding that the parties who have reached an agree-
ment put the terms of that agreement in writing, thus reflecting that
their discussions are finished and their negotiations over. It is the cre-
ation of this writing that the state legislature has decreed is to serve
as the signal to each side that the other side has been bound and, until
that point is reached, each side is on notice that a representation made
— even a statement that "we have a deal" — cannot be enforced.
Without that writing a party can still change its mind and refuse to be
bound. Hence, the writing requirement also puts parties on notice that
actions they take in reliance upon oral representations are done at
their own peril. Particularly is this true where the parties, as here, are
sophisticated businesses wise to commercial dealings and the require-
ments of the law dealing with their negotiations. As the North Caro-
lina court has acknowledged, a statute of frauds may at times produce
results that seem unfair or "overly harsh." Id. It may even at times
"encourage false denials of otherwise valid oral agreements." Id.
Although "[h]arsh results may occur under the Statute of Frauds, . . .
the mandate of the General Assembly is clear. Were we to rule other-
wise, we would encourage false assertions of . . . oral agreements.
14                     BIG RED v. DAVINES S.P.A.
That is precisely the result the Statute of Frauds is intended to pre-
vent." Id. at 620.

   Second, Big Red attempts to circumvent the normal writing
requirement by alleging that Davines committed an unfair or decep-
tive act or practice during contract negotiations by shaking hands on
the "‘deal,’" J.A. 18, and "instruct[ing] Big Red to proceed with the
necessary arrangements to secure space to warehouse Davines[’]
products in the United States," J.A. 19. But, the parties never struck
a binding deal. Although a statute of frauds is not an absolute defense
to all claims that might arise from actions occurring during negotia-
tions for a contract that the law requires to be in writing to be enforce-
able, we are not at liberty to ignore controlling North Carolina
precedent which indicates that, without more, the type of allegations
leveled by Big Red are simply not enough to state a claim under the
Unfair Trade Practices Act. It is unfortunate that Big Red incurred
expenses in anticipation that a deal would be finalized and memorial-
ized, but it should have known that it had not yet obtained the writing
needed to bind Davines and that, until then, Davines was entitled to
change its mind and to seek a better deal. Indeed, we view such
actions as rather unremarkable in a competitive business setting.
Allowing Big Red to bring a lawsuit based upon Davines’ unenforce-
able promise to execute an enforceable contract would effectively
eliminate the writing requirement from North Carolina law. Without
more, the actions alleged by Big Red simply fall short of the "im-
moral, unethical, oppressive, unscrupulous," or otherwise egregious
actions necessary to state a claim for unfair and deceptive trade prac-
tices under North Carolina law. Marshall, 276 S.E.2d at 403; see also
Slosman, 557 S.E.2d at 182; Computer Decisions, 477 S.E.2d at 266.3
  3
    Lest there be any confusion, we do not hold that an enforceable agree-
ment is a prerequisite to or an element of a claim under N.C. Gen. Stat.
§ 75-1.1, or an absolute defense to one; it is neither. We merely hold that
Big Red has failed to allege that Davines committed acts or practices that
are sufficiently egregious or immoral as to state a claim under the Unfair
Trade Practices Act. In reaching this conclusion, we are counseled, as we
should be, by North Carolina precedent which informs us that the fact
that the alleged acts or practices occurred in the context of contract nego-
tiations for a contract that the North Carolina Legislature has decreed
must be in writing is a relevant consideration in the determination of
whether unfair or deceptive practices have been perpetrated by one
sophisticated business upon another.
                      BIG RED v. DAVINES S.P.A.                      15
                                  III.

   For the foregoing reasons, we hold that the alleged representations
made by Davines during its contract negotiations with Big Red are
insufficient to state a claim for unfair and deceptive trade practices
under North Carolina law. Accordingly, the decision of the district
court dismissing Big Red’s unfair trade practices claim under Rule
12(b)(6) is affirmed.

                                                           AFFIRMED

WILKINS, Circuit Judge, dissenting:

  The majority affirms the dismissal of Big Red’s suit pursuant to
Fed. R. Civ. P. 12(b)(6), concluding that Big Red has no claim against
Davines under the North Carolina Unfair Trade Practices Act
(UTPA), see N.C. Gen. Stat. § 75-1.1 (1999). I respectfully dissent.

                                   I.

   The majority opinion appears to be premised on what the majority
understands to be the relationship between the UTPA and traditional
contract law. According to the majority, Big Red’s UTPA claim rep-
resents an effort to "circumvent the statute of frauds (and achieve per-
haps an even better financial result) by pursuing an action for treble
damages" under § 75-1.1. Ante at 6. This characterization does not
recognize that § 75-1.1 does more than merely authorize enhanced
damages for aggravated breach of contract. Section 75-1.1 creates an
independent cause of action that was specifically designed to provide
relief in situations where "common law remedies had proved often
ineffective." Marshall v. Miller, 276 S.E.2d 397, 400 (N.C. 1981); see
also id. at 402 (rejecting notion that recovery under UTPA is limited
"to cases where some recovery at common law would probably also
lie"). The UTPA cause of action is "broader than traditional common
law actions," id. at 402, and is not constrained by doctrines tradition-
ally applied in common law breach of contract actions, see Bernard
v. Cent. Carolina Truck Sales, Inc., 314 S.E.2d 582, 584 (N.C. Ct.
App. 1984).
16                    BIG RED v. DAVINES S.P.A.
   The distinctive character of the UTPA is reflected in the many pre-
cedents decoupling UTPA actions from breach of contract actions.
Thus, on the one hand, a mere breach of contract does not give rise
to a claim under § 75-1.1. See Computer Decisions, Inc. v. Rouse
Office Mgmt. of N.C., Inc., 477 S.E.2d 262, 266 (N.C. Ct. App. 1996).
On the other hand, neither the statute itself nor the pertinent North
Carolina case law requires proof of any contractual relationship
between the plaintiff and the defendant. See Prince v. Wright, 541
S.E.2d 191, 196 (N.C. Ct. App. 2000) (noting that UTPA claims usu-
ally involve buyer-seller relationships but "courts have also recog-
nized actions based on other types of commercial relationships,
including those outside of contract."). The test applied to the defen-
dant’s acts is not whether they were proscribed by an enforceable
agreement, but rather whether they "offend[ed] established public pol-
icy" or were "immoral, unethical, oppressive, unscrupulous, or sub-
stantially injurious." Walker v. Sloan, 529 S.E.2d 236, 243 (N.C. Ct.
App. 2000) (internal quotation marks omitted).

   In light of the purposes of the UTPA and the principles enunciated
by the North Carolina courts, the traditional strictures of contract law
—such as the statute of frauds—should not be imported into the
UTPA context. See Marshall, 276 S.E.2d at 400 (noting that UTPA
was enacted partly because of obstacles to relief in breach of contract
actions). On the contrary, regardless of whether a plaintiff has a via-
ble breach of contract claim, the UTPA will afford a remedy if the
defendant engaged in conduct such as fraud, see Norman v. Nash
Johnson & Sons’ Farms, Inc., 537 S.E.2d 248, 266 (N.C. Ct. App.
2000), review denied, 547 S.E.2d 13, 14 (N.C. 2001); breach of a
fiduciary duty, see id.; intentional misrepresentations inducing reli-
ance, see Bernard, 314 S.E.2d at 584; or "an inequitable assertion of
[the defendant’s] power or position," see Walker, 529 S.E.2d at 243
(internal quotation marks omitted).

   Big Red’s allegations, which we are bound to accept at this early
stage of the litigation, unquestionably describe conduct of this nature.
Big Red pled a fraud claim in its complaint, see J.A. 26-28, and all
of the allegations supporting this claim were incorporated by refer-
ence into the UTPA claim, see id. at 29. In addition, the complaint
alleges that Davines falsely assured Big Red that a Master Distribu-
tion Agreement would be signed and then "instructed Big Red to pro-
                      BIG RED v. DAVINES S.P.A.                      17
ceed with the necessary arrangements," id. at 19; Big Red responded
by leasing a warehouse and ordering a large quantity of Davines prod-
ucts for distribution. In other words, the complaint alleges that
Davines intentionally made false statements to promote its own inter-
ests, and that Big Red relied on these falsehoods to its detriment. Such
behavior includes misrepresentations inducing reliance and an "ineq-
uitable assertion" of Davines’ position, both of which are actionable
under the UTPA.

   Notwithstanding these allegations, the majority concludes that
relief on Big Red’s UTPA claim is barred by a provision of contract
law—the statute of frauds. As noted above, however, such contract
law concepts do not apply to UTPA claims.

                                  II.

   According to the majority, two precedents—Computer Decisions
and Process Components, Inc. v. Baltimore Aircoil Co., 366 S.E.2d
907 (N.C. Ct. App.), aff’d, 374 S.E.2d 116 (N.C. 1988) (per curiam)
—together establish that UTPA relief is unavailable to Big Red due
to the absence of a binding written agreement. I believe the majority
reaches this conclusion based on its importation of contract law into
the UTPA context.

                                  A.

   In Process Components, the defendant ("BAC") promised the
plaintiff ("PROCOM") exclusive rights to distribute BAC products to
certain customers; as a result of these promises, PROCOM leased a
warehouse and incurred other expenses in preparation for becoming
a BAC distributor. See id. at 909. BAC later revealed, however, that
it was still bound by a previous agreement with another distributor,
which prevented PROCOM from obtaining the exclusive distributor-
ship rights that it had been promised. See id. The North Carolina
Court of Appeals held that "[t]he evidence of [BAC’s] misrepresenta-
tions clearly supports the court’s conclusion that [BAC’s] unfair or
deceptive acts or practices caused injury to [PROCOM]." Id. at 911.

  The same court rejected the imposition of UTPA liability in Com-
puter Decisions. In that case, the plaintiff ("CDI") sought to lease
18                     BIG RED v. DAVINES S.P.A.
office space from the defendant ("Rouse"). See Computer Decisions,
477 S.E.2d at 263. After the parties orally agreed as to some but not
all terms of the lease, a Rouse vice-president assured CDI’s president,
"We have a deal." Id. at 264 (internal quotation marks omitted). The
parties then negotiated further and exchanged draft leases for approxi-
mately six weeks until Rouse informed CDI that it had decided to
lease the space in question to another tenant. See id. At that point,
Rouse knew that CDI had only one month left on its existing lease.
See id. The appellate court held that CDI was not entitled to relief
because it had not shown "substantial aggravating circumstances
attendant to the breach" of the (unenforceable) oral lease. Id. at 266.

   The distinction between these cases lies in the extent of the decep-
tions practiced by each defendant. In Process Components, the jury
found that BAC falsely represented certain crucial facts. See Process
Components, 366 S.E.2d at 910. The opinion in Computer Decisions
does not indicate that CDI made comparable allegations about
Rouse’s conduct.*

   In light of this distinction, the present case is controlled by Process
Components, not Computer Decisions. Big Red specifically alleged
that Davines made false representations regarding the proposed Mas-
ter Distribution Agreement. Big Red further alleged that these misrep-
resentations were intended to induce reliance and resulted in injury to
Big Red. There is no indication in Computer Decisions that CDI made

   *In concluding that Computer Decisions is directly on point, the
majority "assume[s] that [CDI] claimed that [Rouse’s] representation
was false and intended to encourage [CDI] to rely upon the statement and
not seek space elsewhere." Ante at 10 n.1. In essence, the majority
assumes that a failed UTPA claim was pled with all the elements of a
viable UTPA claim and then bootstraps from that assumption to a rede-
finition of the requirements of § 75-1.1. While the majority "see[s] no
other way to read" Computer Decisions, id., I think the text supports a
different interpretation: In order for a plaintiff to prevail on a UTPA
claim arising from the breach of an oral lease, "substantial aggravating
circumstances attendant to the breach must be shown. This the plaintiff
has not done." Computer Decisions, 477 S.E.2d at 266 (citation omitted).
In other words, CDI’s claim failed because CDI did not allege aggravat-
ing circumstances such as deliberate misrepresentations or an intention
to induce reliance.
                      BIG RED v. DAVINES S.P.A.                       19
similar allegations. In Process Components, by contrast, circum-
stances of this nature were proven to the jury and were deemed to
support UTPA liability. This precedent compels reversal of the judg-
ment in favor of Davines.

                                   B.

   According to the majority, the crucial distinction between Com-
puter Decisions and Process Components is not the nature of the alle-
gations but rather the fact that the parties in Process Components
ultimately formed a written agreement, while the parties in Computer
Decisions did not. Thus, the majority treats the existence of a written
contract as a dispositive consideration in Process Components. How-
ever, in its analysis of PROCOM’s UTPA claim, the North Carolina
Court of Appeals did not mention or even indirectly refer to the exis-
tence of a contract. See Process Components, 366 S.E.2d at 910-11.
This is not surprising, because the contract was created after the
events underlying PROCOM’s claim—BAC’s misrepresentations and
PROCOM’s detrimental reliance on them. In other words, the UTPA
violation was complete before any contract existed.

   To hold that BAC became liable for pre-contractual misrepresenta-
tions only because a contract was subsequently formed and reduced
to writing is inimical to the purposes underlying the UTPA. As dis-
cussed above, § 75-1.1 was enacted to provide relief for unscrupulous
behavior that might not give rise to traditional tort or breach of con-
tract actions. An approach that makes relief under § 75-1.1 depend on
subsequent contract formation allows the scoundrels of the business
world to avoid UTPA liability by simply breaking off negotiations
once their deceptions have served their purpose.

   Furthermore, the opinion in Computer Decisions does not support
the majority’s conclusion that the absence of a written contract pre-
cluded UTPA relief in that case. The state court held that the statute
of frauds barred relief on CDI’s breach of contract claim. See Com-
puter Decisions, 477 S.E.2d at 265. As to the UTPA claim, however,
the court expressly acknowledged that a claim under § 75-1.1 will lie
when the breach of an (unenforceable) oral lease is accompanied by
aggravating circumstances. See id. at 266. This acknowledgment con-
tradicts the majority’s implicit conclusion that a written (and therefore
20                      BIG RED v. DAVINES S.P.A.
enforceable) contract is a condition precedent to UTPA relief for false
representations occurring during the negotiation of an agreement sub-
ject to the statute of frauds.

   It is true that the Computer Decisions court noted the absence of
an enforceable contract as one circumstance distinguishing that case
from an earlier decision. See id. (distinguishing Mosley & Mosley
Builders, Inc. v. Landin Ltd., 389 S.E.2d 576 (N.C. Ct. App. 1990)).
But the contract in Mosley was in effect at the time of the defendant’s
misconduct. See Mosley, 389 S.E.2d at 577-78 (describing dispute
arising from conflicting interpretations of lease). Thus, neither Com-
puter Decisions nor Mosley supports the majority’s determination that
contract formation after the defendant’s deceptive acts is relevant to
a UTPA claim. At most, Computer Decisions establishes that the exis-
tence of an enforceable written agreement at the time of a defendant’s
misrepresentations may assist the plaintiff in making its UTPA claim.
The absence of such an agreement does not preclude relief here, how-
ever, because all the circumstances that supported UTPA liability in
Process Components—deliberate misrepresentations and ensuing
injury—are also alleged here.

     For the foregoing reasons, I dissent.
