Cheat Sheet- Specific False OR Misleading Representations PDF

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CHEAT SHEET: SPECIFIC FALSE OR MISLEADING REPRESENTATIONS Consumer law pp. 249-313 ACL s. 29: False or misleading representations about goods or services (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or service: (a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or (b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or (c) make a false or misleading representation that goods are new; or (d) make a false or misleading representation that a particular person has agreed to acquire goods or services; or (e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or (f) make a false or misleading representation concerning: i. a testimonial by any person; or ii. representation that purports to be such a testimonial; relating to goods or services; or (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or (h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or (i) make a false or misleading representation with respect to the price of goods or services; (j) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or (k) make a false or misleading representation concerning the place of origin of goods; or (l) make a false or misleading representation concerning the need for any goods or services; or (m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or (n) make a false or misleading representation concerning a requirement to pay for a contractual right that: i. is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); and ii. a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law). Note 1: Note 2:

A pecuniary penalty may be imposed for a contravention of this subsection. For rules relating to representations as to the country of origin of goods, see Part 5-3.

1) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary. 1

2) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or (b) have the effect of placing on any person an onus of proving that the representation is not misleading Important differences between ACL. S 18 and s 29  s 18 is a general provision, whereas s 29 is specific and exhaustive  s 18 refers to engaging in conduct, whereas s 29 refers only to making representations  s 18 is a civil provision (standard of proof to be on the balance of probabilities), whereas s 29 is both civil and criminal (proof beyond reasonable doubt)  s 18 prohibits conduct ‘in trade or commerce’ as does s 29  s 29 has the additional requirement of ‘in connection with the supply or possible supply of goods or services’ or ‘in connection with the promotion by any means of the supply or use of goods or services’; and  Adverse publicity orders, disqualification orders, pecuniary penalties and infringement notices are not available for contravention of s 18 but are with s 29 Key elements of ACL s. 29: You must establish the elements! 1. Person 2. In trade or commerce 3. In connection with 4. Make a representation 5. That is false or 6. Misleading 1. Who is the person making the false or misleading representation? In law a person includes all legal entities  A person can be individuals within states and territories  A person can be carrying on business within the state or territory  A person who is ordinarily resident in or otherwise connected to Australia regardless of whether the conduct occurs inside or outside Australia A person can be corporations within the Commonwealth  Corporations as defined in CCA s. 4(1) o Foreign corporation, s 4(1) CCA o Financial corporation, s 4(1) CCA o Trading corporation, s 4(1) CCA: substantial corporate activity is trading:  Adamson’s Case and Red Cross Case tells us that we should look at the current activities within the corporation 2. Is it IN trade or commerce? Trade or commerce is defined in ACL s 2, but the terms ‘trade’ and ‘commerce’ themselves are not defined so reference to Concrete Constructions Case a) Trade or commerce within Australia; or b) Trade or commerce between Australia and places outside Australia and includes any business or professional activity (whether or not carried on for profit) Remember that profit-making is not an essential element!  Conduct IN trade or commerce must have a trading or commercial character, cf. Concrete Constructions Case 2

3. Is it in connection with? Not defined in the ACL and have not been interpreted in term of s 29  Conduct relating to s 29 must occur in connection with the supply of goods or services or the promotion  The words ‘in connexion with’ have a wide meaning, requiring merely a relation between one thing and another, Our Town FM Pty Ltd v Australian Broadcasting Tribunal 4. Is the person making a representation? Defined as  An oral or written statement made by one person to another, usually with the intent to persuade the other person to take a particular course of action, such as entry into a contract  Can be an express representation (antique) or may be an implied (window of antique shop) 5. Is it false?  Contrary to fact  Does not require knowledge (or intention) on the part of the person making the representation 6. It is misleading? The test for determining whether representations in relation to goods or services are ‘misleading’ for the purposes of s 29(1) is the same as the test for determining whether conduct is misleading for the purposes of s 18(1)  Conduct will be “misleading or deceptive” if it induces or is capable of inducing error, cf. Parkdale v Puxu  See cheat sheet about misleading or deceptive conduct relation to s 18

ACL s. 29(1)(a): Particular standard, quality, value, grade, composition, style, model, history or use of goods “a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;” Section 29(1)(a) includes:  Representations about the style of the goods, which could include: o The design or the designer of the goods; or o The accuracy of a reproduction of other goods;  Representations about the model of the goods, which could include whether the goods match the characteristics of a particular make or model of the goods;  Representations about the previous history or use of the goods, including: o The origin and age of the goods; or o The previous ownership of the goods; or o The historical uses or associations of the goods What does particular in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  ‘Indicated’ or ‘certain’ standard – broad definition, Given v C V Holland What does standard in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary 3

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A definite level of excellence, attainment, wealth or the like Narrower than ’quality’, Ducret v Chaudhary’s Oriental Carpet Palace

What does quality in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  An attribute, property, special feature, nature, kind or character (of something).  Need to be read in their context in relation to the goods whose quality is being considered  Broad meaning should be given to the word, Ducret v Chaudhary’s Oriental Carpet Palace What does value in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  The material or monetary worth of a thing; the amount of money goods, etc, for which a thing can be exchanged or traded  Examples can be value of business high, when really insolvent, market value $40,00 when $2000 What does grade in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  A degree in rank, proficiency, quality, intensity, or value  Narrower in scope than the word ‘quality’  Examples if vegetables are ‘A-grade’, when they are not What does composition in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  A substance or preparation formed by a combination or mixture of various ingredients; a compound artificial substance serving the purpose of a natural one  Examples if orange juice is all of oranges, when actually 2/3 is water, ACCC v Cadbury Schweppes Pty Ltd What does style in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  A particular or characteristic way, form or technique of making or producing a thing, a work of art; a way of executing a task; a manner of performance What does model in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  Design, pattern, or structural type of a material or immaterial thing  Examples with vehicles is the latest model or vehicle contains features X, Y and Z What does history or previous use in s 29(1)(a) mean?  Consistent with the ordinary meaning of the word from dictionary  Apply to situations where mechanical devices measuring usage, eg. motor vehicle odometers, are adjusted so as to display lesser usage than is actually the case Section 29(1)(b): Particular standard, quality, value, grade of services “a false or misleading representation that services are of a particular standard, quality, value or grade” 

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Representations about the nature of the services, which could include: o The way in which the services are, have been or might be undertaken, including specific methods or processes; or

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o The persons who will or might undertake the services and whether those persons have undertaken the services previously; or o The correspondence of the actual services or the way in which those services are undertaken with a description of those services; Representations about the standard, quality or grade of the goods, which could include: o The suitability of the services for the purposes to which they are to be put or the matter to which they relate; or o The qualifications and previous experience of the persons who will undertake the services; or o The amount of work to be undertaken as part of the supply of the services and the relationship of that work with the cost of the services. Note that ‘particular standard, quality value or grade’ in s 29(1) (b) of the ACL are interpreted in the same way as the words appear in s 29(1)(a)

Section 29(1)(c): New goods “make a false or misleading representation that goods are new;” What does new in s 29(1)(c) mean?  A question of fact in each case and the context in which the representation is made  Should be new in all senses  May not be new even if it is used for a comparatively short period (think car), Annand & Thomson Pty Ptd v TPC Section 29(1)(d): Particular person has agreed to acquire the goods or services 1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods “a false or misleading representation that a particular person has agreed to acquire goods or services” What does s. 29(1)(d) cover?  Could cover a representation that a particular person has agreed to acquire the goods or services, for example: o That another person has, may or will acquire the goods or services; or o That that other person has, may or will acquire the goods or services for a particular price or at a particular time; or o That that other person has, may or will acquire a specific form of the goods or services Section 29(1)(e): Purported testimonials “make a false or misleading representation that purports to be a testimonial by any person relating to goods or services” What does s 29(1)(e) cover?  Prohibits representations of fictitious testimonials  Also prohibits genuine testimonials where the testimonial is misrepresented or misquoted  S 29(2) provides a rebuttable presumption that representations concerning a testimonial are misleading o Explanatory Memorandum provides the following explanation of s 29(2): Failure to adduce evidence to the contrary when it is alleged that a person has made a false or misleading representation concerning a testimonial will result in the representation being found to be misleading Section 29(1)(f): Concerning testimonials or purported testimonials 5

Make a false or misleading representation concerning: i. a testimonial by any person; or ii. a representation that purports to be such a testimonial; relating to goods or services; or What does s 29(1)(f) cover?  Prohibits a person from making false or misleading representations that concerns: o A person’s testimonial relating to goods or services; or o A representation that purports to be such a testimonial, relating to goods or services  Prohibits representations of fictitious testimonials  Also prohibits genuine testimonials where the testimonial is misrepresented or misquoted Section 29(1)(g): Sponsorship, approval, performance characteristics, accessories, uses or benefits “Make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits” What does s 29(1)(g) cover?  Representations that the goods or services are, in some way, sponsored by another person or entity  Representations that a person or other entity has approved of the goods or services  Representations that the goods or services will or could: o Reach specified or nonspecified performance standards or levels o Deliver specified or nonspecified benefits or enhancements o With respect to goods, last for specified or nonspecified periods of time or a specified or nonspecified number of uses o Tolerate specified or nonspecified physical circumstances (including, for example, pressures or stresses) in their use or undertaking;  Representations that the goods or services come with other accessories  Representations that the goods or services have particular uses either generally or in addition to those for which they are to be or have been supplied;  Representations that the goods or services will provide the person acquiring them or other persons with benefits Section 29(1)(h): Sponsorship, approval or affiliation of persons “Make a a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation” What does s 29(1)(h) cover?  Representations that the person is, in some way, sponsored by, approved of or affiliated with another person or entity  Representations that a person or other entity has sponsored, approved of or extend an affiliation to the person Section 29(1)(i): Price of goods or services “make a false or misleading representation with respect to the price of goods or services” What does s 29(1)(i) include?  A representation that the goods or services: o Will be supplied for a particular price or at a particular discount; or o May be paid for in a particular way or at a particular time or times  Defined in s 2 of the ACL o The amount paid or payable, which includes any charge of any description, such as delivery charges 6

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Note that price is the total amount payable for the goods or services, which includes all fees and charges, ACCC v Dell Computers Pty Ltd

Important terms relating to s 29(1)(i) When the costs of a free offer are recouped by means of price is it truly free - ‘buy one, get one free’ offer or 10% free - could be misleading  Free (in relation to content) o Product does in fact contain the thing that it claims to be ‘free from’ o 0,1 per cent concentration may be perceived as misleading or deceptive  Cost price o Landed cost of the goods to the retailer  New o Not used, repaired, reconditioned or used in display, and also not old or already known  Cheapest o Comparisons of one product with all others - needs to withstand factual scrutiny or likely to be challenged by competitors and/or the ACCC o May of course qualify as puffery, as no one would reasonably be misled or be deceived by it  Sale o May indicate that some goods are now on offer for a certain period at less than their normal price or goods are simply available for purchase  Discount o Real one - if not completely bona fide, consumers may be misled Section 29(1)(j): Repairs and spare parts of goods “make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods” What does s 29(1)(j) cover?  Representations made by a person concerning the availability of facilities for the repair of goods or of spare parts for goods when no such parts or facilities for the repair are Section 29(1)(k): Place of origin “Make a false or misleading representation concerning the place of origin of goods” What does s 29(1)(k) cover?  A representation that goods were manufactured in a particular place; or  A representation that the contents of the goods came from a particular place; or  A representation that the goods were ‘made in’, the ‘product of’ or ‘grown in’ a particular place  Country of origin of goods is narrower than the scope of representations in relation to place of origin of goods Section 29(1)(l): Need for any goods or services “(l) make a false or misleading representation concerning the need for any goods or services” What does s 29(1)(l) cover?  A ‘need’ can be o Needs a particular good or service o Needs to acquire a certain amount of goods or hire a certain amount of labour. o Statement made by a professional or expert where a reasonable consumer would rely on the advice of the professional or expert 7

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Representation that the goods or services are necessary in particular circumstances or at all; or Representation that the goods and services are required in the light of a specific event or as a consequence of specific circumstances; or Representation that a failure to provide the goods or services will result in specific things occurring or not occurring. Examples can be making letters look like organ from government and the fees are mandatory or the need to nominate doctor

Section 29(1)(m): exclusion or effect of any condition, warranty, guarantee, right or remedy “make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2)” What does s 29(1)(m) cover?  A condition, warranty, guarantee, right or remedy, including the statutory guarantees provided by the ACL: o Does or does not exist with respect to the goods or services, either at all or in specified circumstances; or o May or may not be excluded with respect to the goods or services, either at all or in specified circumstances; or o May or may not have a particular effect with respect to the goods or services, either at all or in specified circumstances. Important terms relating to s 29(1)(m-n) Condition  Contract law meaning  An essential term of a contract  ‘heart’ or ‘root’ of the contract  Objective test to determine the intention of the parties at the time the contract was made - test of essentiality  Of such importance to the promise that he [or she] would not have entered into the contract unless he [or she] had been assured of a strict or substantial performance of the promise Warranty  Exp...