Under the s 18 of Australian Consumer Law a person must not, in trade or commerce, engage in conduct that is misleading or likely to mislead or deceive. This section focusses upon conduct rather than representations that may be made. Conduct is defined as doing or refusing to do any act. Engaging in conduct that is misleading essentially means that a misrepresentation has been made, whether it be express or implied.
It is not necessary that the conduct actually misleads or deceives, nor is there a requirement that there was intention to mislead, only that it has a tendency to mislead.
Silence may constitute misleading or deceptive conduct under the ACL if the information that is not said substantially affects the accuracy of what is actually said. Liability may arise as a result of silence if there is a reasonable expectation that the fact would be disclosed.
If a party makes an opinion, promise or prediction that is not upheld, this will not amount to misleading or deceptive conduct. On the other hand however, if it arises that an opinion, promise or prediction was made intending to not be upheld or made without reasonable grounds, the conduct will amount to being misleading. In such a case, the representor would be required to prove that reasonable grounds existed.
In determining whether conduct has a tendency to mislead or be deceptive it is first necessary to determine the characteristics of the recipient of the conduct. For example, where the audience is an expert, the standard for determining whether the conduct is misleading or deceptive may be higher. It is then a requirement to identify what responsibility that class of people owe to themselves to look after their own interests. If it is the case that the conduct goes beyond the scope of taking reasonable care of the parties own interests and that the conduct is likely to mislead that particular audience, it may be that misleading or deceptive conduct has occurred.
This provision has the potential to apply to a range of situations, in particular it has been applied to misleading advertising in the media, deceptive selling practices and statements made in the course of pre-contractual negotiations. It is important to remember however that the provision will only apply in trade or commerce. This means that private dealings are not able to be captured by the scope of the provision.
Should you be concerned that there may be a dispute arising out of conduct before an agreement was entered, and that led to the agreement being entered, then speak to us for advice and what your rights may be. We are engaged regularly in relation to disputes that involve allegations of misleading and deceptive conduct and have significant experience in handling matters of this nature.