Federal legislation provides protection for people that are misled in business. Section 18 of the Australian Consumer Law says that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
The courts have spent much time in considering what sort of conduct is able to be categorised as misleading or deceptive or conduct likely to mislead or deceive.
Generally to be misleading there must be a statement made about a fact, and the statement must be false. To make a statement of fact is to refer to an objective feature which is not reasonably disputable. An example of a statement of fact is to say that a car is 4 metres long.
Where someone expresses an opinion, the law on misleading and deceptive conduct is less clear. An example of an opinion would be to say that a car is nice, or that a car is safe. Those statements are not statements of fact. Two people could reasonably come to differing views on the car based on the information they have and the way that any information is applied to the person’s subjective standards.
Courts have said that a statement of opinion can be misleading when there are no grounds for expressing the opinion. For example if a person was to say that a car was safe, when they in fact knew that the brakes did not work.
Advertising puffery is when sellers describe items without reference to any particular standard. For example to say that a car is nice. How nice a car might be to an individual probably depends on what they currently drive and cannot easily be compared to any global standard. Generally, advertising puff is unlikely to be considered misleading or deceptive.
Silence is rarely considered to be misleading or deceptive. Staying silent is no act at all, and therefore generally, the courts have said that remaining silent does not satisfy the requirement of conduct under section 18 of the ACL . There are however, three main exceptions which apply to that general rule.
Firstly, where there is a reasonable expectation that the matter not announced should be disclosed.
Secondly, where a half truth is told. For example to say a car is 4 metres long, without going on to say that the reason for the length of the car is because the bumper bar is partly detached and is dragging behind it.
Thirdly where a representation about a factual matter is initially made, but the state of the factual matter subsequently changes, and there is an obligation to tell of the change in circumstances.
If you think you have been the subject of misleading and deceptive conduct, please contact Everingham Solomons, because Helping You is Our Business.
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