Competition and Consumer Law - Misleading and Deceptive Conduct in Business
What is it and how do I avoit it?
March 2014
Everyone in business communicates with other businesses and with the public. In trying to enhance a personal position in those communications people sometimes overstate things. Care is required. This may be “misleading and deceptive conduct”.
Misleading and deceptive conduct is described in Section 18 of the Australian Consumer Law as: “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.
A “person” can be a natural person and a business partnership or a company. Conduct in trade or commerce covers the buying and selling of goods and services as well as such things as employment negotiations. Public commentary by a business or industry group may also be held to be conduct in trade or commerce where that commentary has the underlying purpose of promoting that industry.
What is misleading or deceptive? Any conduct or statement (or silence) which upon the testing of the evidence shows a divergence from those facts may be held to be misleading or deceptive provided that the person misled can demonstrate that they relied on the conduct in their decision making and have suffered a detriment as a result.
The type of conduct in question is extremely broad. It may be written or verbal words, images, advertisements of any description and in some cases the conduct may be that a person may say nothing at all but by their conduct in remaining silent as to a certain issue allow another party to be misled or deceived.
It does not matter if the conduct is intentional or not. The Act also covers conduct that is likely to mislead or deceive as well as conduct which actually does result in a deception.
One of the main areas where businesses need to exercise caution is in advertising and in contractual arrangements with customers. Advertisements should be accurate in describing the services on offer. A charter boat company offering tours through the upper tributaries of the Parramatta River would do well to not feature the Harbour Bridge or the Opera House on their advertising materials. In terms of contractual arrangements, a good starting point is to simply apply common sense. If you provide a written undertaking to do something, you must do that. If there is risk that it may not be possible, for example due to weather fluctuations, ensure that your customers are aware of such variables and it is written in the contact.
Accuracy is the best policy. Unfortunately, the unpredictability of an irate consumer may still cause you problems. So, for any advice on what to provide in your contracts and advertising or if a problem arises, please contact us at Bradfield & Scott.
Misleading and deceptive conduct is described in Section 18 of the Australian Consumer Law as: “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.
A “person” can be a natural person and a business partnership or a company. Conduct in trade or commerce covers the buying and selling of goods and services as well as such things as employment negotiations. Public commentary by a business or industry group may also be held to be conduct in trade or commerce where that commentary has the underlying purpose of promoting that industry.
What is misleading or deceptive? Any conduct or statement (or silence) which upon the testing of the evidence shows a divergence from those facts may be held to be misleading or deceptive provided that the person misled can demonstrate that they relied on the conduct in their decision making and have suffered a detriment as a result.
The type of conduct in question is extremely broad. It may be written or verbal words, images, advertisements of any description and in some cases the conduct may be that a person may say nothing at all but by their conduct in remaining silent as to a certain issue allow another party to be misled or deceived.
It does not matter if the conduct is intentional or not. The Act also covers conduct that is likely to mislead or deceive as well as conduct which actually does result in a deception.
One of the main areas where businesses need to exercise caution is in advertising and in contractual arrangements with customers. Advertisements should be accurate in describing the services on offer. A charter boat company offering tours through the upper tributaries of the Parramatta River would do well to not feature the Harbour Bridge or the Opera House on their advertising materials. In terms of contractual arrangements, a good starting point is to simply apply common sense. If you provide a written undertaking to do something, you must do that. If there is risk that it may not be possible, for example due to weather fluctuations, ensure that your customers are aware of such variables and it is written in the contact.
Accuracy is the best policy. Unfortunately, the unpredictability of an irate consumer may still cause you problems. So, for any advice on what to provide in your contracts and advertising or if a problem arises, please contact us at Bradfield & Scott.
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Mat Henderson
Lawyer Bradfield & Scott Lawyers Level 1, 175 Macquarie Street Sydney NSW 2000 Telephone: 9233 7299 Email: mhenderson@bradscott.com.au |
John Graves
Principal Bradfield & Scott Lawyers Level 1, 175 Macquarie Street Sydney NSW 2000 Telephone: 9233 7299 Email: jgraves@bradscott.com.au |
