Unfair Trade Practices
Prepared by Mr Hafidz Hakimi Bin Haron
Edited by Putri S. Akma
ADVERTISING
Advertisement in S 3(1):
by the display of notices;
by means of catalogues, price lists, circulars, labels, cards or
other documents or materials;
by exhibition of films or of pictures or photographs; or
by means of radio, television, telecommunications or any other similar
means.
ADVERTISING
Rebuttable presumption of liability - s18:
Deemed to have been made by :
a) the person who claims to supply the goods/services
b)Person on whose behalf the advertisement made
c)Both
The role of advertising
The role of advertising in product marketing is to inform
potential consumers of the benefit, function, and/or the
price to create the action of purchase.
Advertising is the central symbol of the consumer society.
Advertising promote consumption by playing on
emotions.
What is a misleading advertisement?
An advert is misleading if it deceives or is likely
to deceive its audience and affect their
economic decision-making.
This also applies if it harms or is likely to harm
a competitor of the organisation placing the
advertisement.
What is a misleading advertisement?
An advert will be likely to affect the economic
decision-making of readers if, for example, it persuades
them to part with money.
A misleading advertisement can be a spoken statement -
eg, given by a sales representative, in person or over
the phone. It does not have to be in writing.
Cont…
An advert can be deceptive in various ways, for example,
if it:
1. contains a false statement of fact - this may be possible to
prove or disprove by evidence
2. conceals or leaves out important facts
3. promises to do something but there is no intention of
carrying it out
4. creates a false impression, even if everything stated in it may
be literally true.
Director General of Fair Trading -v- Tobyward [1989] 2
All ER 266 1989
The company advertised a product as assisting in
permanent weight loss. The Advertising Standards
Authority had found the advertisements to be
misleading, but the company persisted, and referred the
case to the applicant, who sought an injunction. Held:
The court had jurisdiction to grant the injunction
requested.
Types of misleading advertisement:
1. Misleading Conduct
2. False/misleading representation
3. False representation & misleading conduct in relation
to land
4. Misleading indication as to price
Misleading Conduct
Definition of “misleading or deceptive” is in section 9 of
CPA :
In relation to goods… misleading or deceptive…
In relation to services… misleading or deceptive…
What does “misleading or deceptive” really mean?
Elaborate in World Series Cricket Pty Ltd v Parish (1977)
16 ALR 181 at 201;
Before a statement can be said to be misleading or deceptive or falsely to
represent a fact, it must convey meaning inconsistent with the truth. A
statement which conveys no meaning but the truth cannot mislead or
deceive or falsely represent."
Test of misleading conduct in Annand & Thompson Pty
Ltd v TPC (1979) 25 ALR 91:
Is not material whether the person being deceived by the
conduct, but whether the conduct was misleading or
deceptive”
Intention of a person to misled is irrelevant under s.9
A person who has acted honestly and reasonably may
still be guilty if its conduct has in fact misled or deceived
or is likely to mislead or deceive
FALSE OR MISLEADING REPRESENTATION
Under Contract Law, misrepresentation is an untrue
statement during negotiations leading up to a party
entering to contract.
S 18 of CA 1950 provides the definition of
‘misrepresentation’ as:
a) positives assertion… of that which is not true, even believes
to be true..
b) any breach of duty, without intent to deceive gives an
advantage to the person who committing it….
c) causing another party to enter into agreement to make a
mistake as to the substance of the agreement
Puff Advertisement?
Puffs : self-evident exaggeration
Not capable of serious assessment as a serious
representation
Law does not prohibit “puffs”
But there are certain distinction between puffs and
misrepresentation; different from case to case basis.
Example: Budget Rent A Car System Pty Lyd v Dewhirst
Lose weight in 30 days
Task : [Link]
UCS2612 PROJECT
CHALLENGE 2020
BRIEFING DECK
22 JULY 2020 | WEDNESDAY
Country of origin labelling
Another area of potential difficulty concerns statements
declaring the "place of origin of the goods”.
In Siddons Pty Ltd v Stanley Works Pty Ltd
held that a metal spanner shaped in Taiwan and later modified
and finished in Australia was not made in Australia.
In its opinion, a "Made in Australia" label meant in
ordinary parlance that most of the processes by which a
piece of metal was brought into the shape of a tool as
sold must have occurred in Australia.
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FALSE REPRESENTATION & MISLEADING CONDUCT IN
RELATION TO LAND
Section 11(1) of CPA :
(a) falsely represent that any person has any sponsorship,
approval, endorsement or affiliation; or
(b) make a false or misleading representation concerning any
or
all of the following:
i. the nature of the interest in the land;
ii. the price payable for the land;
iii. the location of the land;
the characteristics of the land;
i. the use to which the land is capable of being put or may
lawfully be put;
ii. the existence or availability of facilities associated with the
land."
MISLEADING INDICATION AS TO PRICE
S 12 of CPA
“It is an offence for a person in the course of his business to give
consumers a misleading price indication about goods, services,
accommodation (including the sale of new homes) or facilities. “
S 12(2) it is immaterial ;
The culprit acting on his behalf or another
Whether or not the culprit who gives indication is the person or
included among the persons from whom the goods/services available
Whether indication is or becomes misleading in relation to all the
consumers to whom it is given or only in relation to some of them
Toys R'Us v Gloucestershire County Council (1994) 158 JP
338
The misleading price offence was not committed when the goods sold
at lower cost than displayed.
MISLEADING INDICATION AS TO PRICE
BAIT ADVERTISING
Bait advertising is an alluring but insincere offer to sell a
product or service which the advertiser in truth does
not intend or want to sell.
Its purpose is to switch consumers from buying the
advertised merchandise, in order to sell something else,
usually at a higher price or on a basis more advantageous
to the advertiser.
The primary aim of a bait advertisement is to obtain
leads as to persons interested in buying merchandise of
the type so advertised.
S13 prohibits bait advertising.
Case : Wallace v Walplan Pty Ltd (1985)
Wallace v Walplan Pty Ltd (1985).
Here, a car dealer advertised for sale a Ford Falcon XD Sedan and a Holden
Commodore Sedan. They offered the vehicles for sale at a special price of
$2,990 in a full-page advertisement in a newspaper. The ad showed pictures
of the cars and the heading said ‘$300 cash deposit or your car as full
deposit’. The car dealer advertised each one with a reference to ‘$22.59 a
week’. The advertisement’s footnote, however, said ‘prices remain for one
week’ and that ‘all vehicles in stock at the date of compiling advertisement’.
When a customer came to purchase the vehicle, he was told that it had
been sold and the same answer was given when he enquired about another
car. The customer left and later called the dealership. He confirmed with
them that the cars were in fact still available for purchase.
The court held that an offence had been committed as neither the vehicle
was genuinely available for sale at the advertised price.
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OFFERING PRIZES OR GIFTS
Offering free goods, gifts or prizes attract people like no other
promotional activities
No legal impediments exist in regard to genuine offers of free
goods, prizes, gifts or other free items.
According to s 14(3) of the CPA, a person who offers a gift, prize
or other free item may impose any reasonable condition on the
offer. But where a condition is imposed, the person must describe
the condition clearly.
OFFERING PRIZES OR GIFTS
Ensure that the description of the condition is conspicuously placed
near the expression "free" or "free offer" and the print of the
description of the condition is at least half as large as the print used
for the expression "free" or "free offer". The person making the
offer cannot hide the conditions of the offer in small print.
Case : Federal Trade Commission v Standard Education Society
(1937) 302 US 112
Misleading offer of a free encyclopedia for purchasing a loose
leaf supplement.
“It was clearly the practice of respondents with a well matured
plan, to mislead customers into teh belief that they were given
an encyclopedia, and that they paid only for teh loose leaf
supplement.”
GOODS LIMITED
Section 15(1) prohibits a person from supplying or offering to
supply goods described as "limited" for sale to a consumer
unless their edition, printing, minting, crafting or production is
genuinely restricted.
A claim that goods are limited must state clearly –
a) the maximum quantity of goods which are offered for sale;
and
b) the specific time period or dates for which the goods are
offered for sale.
Information relating to the above must be displayed
conspicuously near the "limited" claim.
DEMANDING PAYMENT OR ACCEPTING PAYMENT
WITHOUT INTENTION TO SUPPLY
Sec. 16 For goods or services if at the time of the demand or acceptance, the person
(a) has no intention to supply the goods or services
(b) intends to supply the goods or services materially different from
the goods or services in respect of which the payment or other
consideration is demanded or accepted; or
(c) does not have reasonable grounds to believe that he will be able
to supply the goods or services within the specified period, or
where no period is specified, within a reasonable time.
DEMANDING PAYMENT OR ACCEPTING PAYMENT
WITHOUT INTENTION TO SUPPLY
Dawson v World Travel Headquarters Pty. Ltd (1980)
change of travel itinerary from 2 days in Singapore to one day plus an
overnight stopover
liable.
Barton v Westpac Banking Corporation (1983) ATPR 40-388 (1983) 76 FCR
101
a tour operator was found to have provided a tour materially different
to that advertised.
Found not to have breached s. 58 of the Australian Trade Practices Act
1974 (corresponds to s. 16) because the prosecution had failed to prove
that it had teh requisite intention.
FUTURE SERVICES CONTRACT - Sec. 17
A "future services contract” is a contract for consumer
services that will be provided on a continuing basis. It
includes, for instance, a cleaning service contract to be
provided by a contractor.
A cancellation of the future services contract needs to be
communicated where reasonably practicable and it may be
done either by words or conduct or both.
It must indicate an intention of the consumer to cancel
though no particular form of words is required.
It need not be in writing unless there is an express provision
in the contract requiring written notice of cancellation.
FUTURE SERVICES CONTRACT - Sec. 17
FUTURE SERVICES CONTRACT - Sec. 17
The Minister of Domestic Trade, Cooperatives and Consumerism have issued the Consumer Protection (Future Services
Contract) (Amendment) Order 2014 (which came into effect in July 2014) to specifically state the categories of services that
would fall under the definition of “future services”:
No. Category of Services Type of Services
1. Body treatment and beauty Weight management and body shaping
Facial beauty treatment and face shaping
Hair and body hair treatment
Manicure & Pedicure
2. Fitness and health Gymnasium, Exercise centre, Aerobic centre
Yoga centre
Spa centre & Massage centre
3. Recreational, lodging and Theme park
entertainment
Hotel and apartment
Golf club & Sport club
FUTURE SERVICES CONTRACT - Sec. 17
No. Category of Services Type of Services
4. Educational Language class, Computer class, Mental arithmetic class
Tuition class in accordance with curriculum or module in school, college or university
5. Personal skill development Cooking class, Sewing class (including embroidery)
Interior design class, Make-up class, Flower arrangement and handicraft class,
Photography class, Arts and design class
Driving class, Music class, Singing or dancing class, Swimming class (including scuba
diving), Martial art class, Modelling class
6. Maintenance Insect and pest control, Vehicle washing and cleaning, Towing broken-down vehicle,
Parking space, Pool cleaning, Housekeeping
7. Other services Matchmaking agency, Memorial and crematorium management, Water filtration
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