The Nature of Misleading or Deceptive Conduct

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Table of Contents

• Definition of Mislead or Deceive – what is the difference?
• Misleading and Deceptive Conduct in other areas of law
• Conclusion

The concept of misleading or deceptive conduct establishes a norm where it is illegal for businesses to engage in conduct that misleads or deceives, or is likely to mislead or deceive. Whether or not this is the case will depend on surrounding circumstances and the target audience. This audience is generally a consumer, whether in their capacity as individuals or as a business.

Section 18 of the Australian Consumer Law in the Competition and Consumer Act 2010 specifies 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 provision applies broadly, so that any party can seek an injunction (an order from the court to stop a party from doing certain acts) against the person contravening section 18. Note that the concept of misleading and deceptive conduct itself has been applied in a string of case law, and is associated with other areas, not only in consumer law.

Definition of Mislead or Deceive – what is the difference?

Although sometimes colloquially referred to as “misleading and deceptive conduct”, note the provision uses the word ‘or’ – that is, a person will contravene section 18 if they engage in conduct that is misleading or deceptive, or likely to mislead or deceive. The words themselves are not indicators of two separate criteria that must be satisfied, but each word prescribes a different standard.

‘Mislead’ is the lower of the two standards. To mislead in the context of section 18, means to be led into error. Therefore, the target audience needs to be led into error by the individual’s conduct. ‘Deceive’ refers to deception, bringing with it a connotation of intent to decieve. Although intention is irrelevant as a consideration, an action brought under section 18 may be more likely to succeed if it can be proven that the alleged contravener intended there be an outcome of error. Due to use of the words ‘likely’, evidence of erroneous conclusion may be persuasive, but are not essential nor determinative (unless seeking compensation). However, these are factors that may be considered by the court.

Section 18 is a provision to stop people from being mislead. Due to the broad applicability of the provision, any person can apply for an injunction pursuant to section 18.

Misleading and Deceptive Conduct in other areas of law

The concept of misleading and deceptive conduct is relevant to numerous areas of law. It is a concept applied in defamation law, advertisements (e.g. representations for using a name, particular character, or comparative advertising), and contract law. Under contracts, there is contractual misrepresentation, where the misleading and deceptive conduct has created some advantage in the course of trade or commerce.

Conclusion

The ACL offers consumers a wide range of protection against bad business practices, including when businesses engage in misleading or deceptive conduct. However, the concept of mislead or deceptive conduct can apply broadly and extends to areas of law including contracts, defamation and advertisement. Our team of litigation lawyers have extensive experience in this legal area. If you are seeking advice regarding contravention of section 18 or other misleading and deceptive conduct, contact LegalVision on 1300 544 755 for a fixed fee quote today.