Section 18(1) of the Australian Consumer Law (ACL) provides that:
A person must not in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
This section of the ACL has a major impact on how businesses in Australia engage in commerce. But what exactly classifies as ‘misleading or deceptive conduct’ and what are the responsibilities of Australian businesses?
What is misleading or deceptive conduct?
Conduct will be misleading or deceptive if it induces, or is capable of inducing, error regardless of the intention on the part of the person engaging in the said conduct.
It is also possible to be liable under section 18 of the ACL for something that was not said, if the failure to speak was misleading in the circumstances.
What does ‘in trade or commerce’ mean?
The purported misleading or deceptive conduct must take place in trade or commerce. This has been interpreted very broadly by the courts and includes most commercial activity but excludes private sales.
What are the possible remedies?
Remedies for misleading or deceptive conduct include damages, injunctions and compensatory orders.
Can I contract out of section 18 of the ACL?
No. It is not possible to draft a clause in a contract that removes potential liability for misleading or deceptive conduct.
Is there a time limit for bringing a claim?
Yes. An action in misleading or deceptive conduct must be brought within 6 years of the cause of action accruing.
We have extensive experience in assisting businesses navigate their obligations under the ACL. If you believe that you may have a claim or need advice in defending a claim under section 18 of the ACL, contact our office on (08) 9228 2881.
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