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Small Business

Misleading or Deceptive Conduct

Section 18 of the Australian Consumer Law (which is contained in the Competition and Consumer Act) prohibits a person, in trade or commerce, from engaging in conduct which is misleading or deceptive or is likely to mislead or deceive. Other sections of the Australian Consumer Law prohibit the making of false representations or claiming false affiliations or associations. State legislation prohibits similar conduct.

Section 18 is most often used by parties who have been misled by representations to enter into an agreement. For example, where a vendor gives incorrect past trading figures for the business they are selling.

Where a person makes a representation in relation to a future matter, e.g. projected sales figures of a business, the representation will be deemed to be misleading unless the company has reasonable grounds for making it and can back up those grounds with evidence.

Remedies may be available if it can be shown that:

  • the misleading or deceptive conduct took place; and
  • the aggrieved party relied upon the conduct, or was induced by the conduct to do something, and as a result suffered loss.

Potential remedies include damages and injunctions.

Further information on misleading or deceptive conduct can be obtained from the Australian Competition and Consumer Commission website or by calling 1300 302 502.

Relevant Legal Issues

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