Professional Documents
Culture Documents
Advertising and
Sales
Use the below template for answering misleading or deceptive conduct / false or misleading representations
There two elements in common for s18 and s29: (important IN-CHRONOLOGICAL order)
Magic Sentence (can copy- guaranteed 1-2 Marks)- ‘it does not matter whether or not the defendant intended to
convey the misleading message to its audience of consumers- intention to mislead or decive is not required for s 18.
It also doesn’t matter whether or not anyone has actually been misled or deceived by the conduct.’
For s29 (False or Misleading representations) need identify at least one of the subsections. Copy the blow
sentence.
Magic Sentence: Next we should consider s29 of the ACL. To establish false misrepresentation, other than the
element elements of ‘person’ and ‘in commerce’, we also need to identify the type of contravention that each
representation falls into (see notes). So just go through conduct and whether the conduct is mislead or deceptive or
likely to mislead (follow the above template).
- For example: False testimonials found in the scenario given i.e. ‘90% of customers have lost 10 kgs in the
first month!’
- Magic Sentence: ‘A finding that s 29 applies brings us to the point that s 29 is a criminal offence provision
carrying significant amount of fines.
SIDE NOTE: the Legal Authority are the s18 and s29.
For s18 and s29: make sure you talk about person and trade or commerce first before everything. Person: whether
the defendant is a person? Natural or company?
- Misleading or deceptive conduct: this has particular significance for advertising but also applies more
broadly to other types of conduct S18 of ACL
- False or misleading representations: more specific categories of representation that are prohibited if they
are false or misleading to consumers S29 of ACL
- Unfair contracts or terms: situations in which sales contracts, or terms of sales contracts, may turn out to be
unenforceable because they were inherently unfair S20-28 of ACL
- Prohibited sales methods: sales practices that are prohibited by law S29 of ACL
Overview of Misleading or Deceptive Conduct s18
Misleading or deceptive conduct is business activity that misleads or deceives consumers (or has the tendency to
mislead or deceive consumers) about some matter relating to a good or service provided by the business. A common
example of misleading or deceptive conduct is false advertising: promotion of a product or service in a way that
misrepresents the suitability or other characteristics of the good or service. Other conducts are:
Section 18:
1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead
or deceive.
‘Persons’: not only applies to individuals or sole traders but to possible business structures (partnership, companies
and trusts). In effect, it applies to all business.
‘Conduct’: i.e. advertising even commissioning for false advertisement. Other behaviours that are held account
include:
- Making-precontractual Statements: a MOD statement made to induce another party to enter a contract (see
contract law notes).
- Expressing opinions or representation about the future: Where a businessperson makes a representation
about some future state or condition knowing that statement to be false or having no reasonable basis for
making the statement.
- Staying silent or doing nothing: Silence (or the holding back of relevant information) will constitute
misleading or deceptive conduct if an ordinary person would reasonably expect to be told that information
due to its relevance or importance to the transaction being considered.
‘In trade or Commerce’: conduct be commercial in character. ‘Trade’ selling goods or services. Important to note
that conduct must occur ‘in’ trade and commerce rather than merely being related to it. Consequently, courts have
ruled that activities such as education, political campaigns, and actions within the workplace are not subject to s 18.
‘When is conduct misleading or deceptive’? conduct which affects customers will be considered MOD if it leads
consumer into error or cause consumers to believe something about a good or service that is inaccurate or false.
Confusion but not error- not considered MOD.
- What is the relevant class of consumers? Group of people that is likely to be exposed to the conduct in
question. To whom is the conduct directed: specific individuals, target audience or the public at large?
- What meaning would the conduct convey to that class of consumers? Consider the conduct from POV of the
relevant class: what would an average member of that class understand the conduct to mean? May be
necessary for the court to identify a hypothetical ‘representative member’ of the class and to determine the
meaning of the conduct through eyes of this person i.e. Weight loss advertisement- directed toward
individuals who wish to loose weight.
- Would the conveyed meaning MOD the relevant class of consumers? An objective, rather than subjective
test: would an average member of the class be led into error about the product? Yes, then conduct is MOD.
Disclaimers and Exclusion Clauses and Labelling : A disclaimer is a statement that seeks to exclude the maker of
the statement from legal liability. Disclaimers in the form of exclusion clauses in contracts, which seek to excuse the
business from liability under the ACL. disclaimer may be effective if its effect is to avoid any suggestion of misleading
or deceptive conduct from arising in the first place. Even if a product has a close resemblance to the product of
another manufacturer to the point where a consumer would be likely to be misled, if the product is properly labelled
with the name of its own manufacturer, will not breach s18. See below.
Comparative Advertising: Special care must be taken by the advertiser to ensure the accuracy of its
advertising. The problem for the advertiser is that the potential to mislead is far greater when using comparative
advertising, as Re Hoover (Australia) Pty Ltd v Email Ltd illustrates. Means that:
Need for goods or services s 29(1)(l) Advertisements inaccurately suggesting particular medical
conditions are serious and require treatment.
Misrepresenting the need to be included in a directory
claimed to be affiliated with the government
Composition, style, model, history or Composition: type and amount of fruit in fruit juices and
previous use of goods s 29(1)(a) cordials; the components of fabrics (e.g. 50% wool)
Style / Model: depicting a 2009 model and stating its 2019
History or previous use: ex-rental cars sold as ex-
executive cars (i.e. used by executives of the
manufacturer); mileage of cars.
Goods are new s 29(1)(c) New, as opposed to used or second-hand. A ‘new’ car may
have much older compliance plates (up to 20 months in
one case) but still be considered ‘new’, as opposed to
second-hand. However, in
some circles new may mean ‘recently made’. The
particular audience should be kept in mind when making
such claims
Availability of repairs and spare parts s 29(1)(j) Promoting the availability of facilities for repair and / or of
spare parts for goods when none are available.
Manufacturers are also required to provide spare parts
and repair facilities for reasonable periods after purchase
of goods.
Origin of goods s 29(1)(k) Making a false or misleading representation about the
origin of any goods is a breach of this section. The issue
has particular relevance to foods.
Existence, exclusion or effect of any condition, ‘No refunds’ signs (consumers have a right to a refund
warranty, guarantee, right or remedy s 29(1)(m) under the ACL if goods are faulty or services are deficient
— a sign stating the opposite is therefore false).
Requirement to pay for existing rights Telling a customer that they must pay for the right to a
s 29(1)(n) refund if a good is faulty or a service is deficient (this right
already exists under the ACL and consequently, the
statement is false).