LAW2102 · Contract B
Misleading or Deceptive Conduct (ACL s 18)
Section 18 of the Australian Consumer Law prohibits a person, in trade or commerce, from engaging in conduct that is misleading or deceptive or likely to mislead or deceive. It is strict liability — no intention is needed. The chapter works through the s 18 checklist: identify the conduct (including silence/half-truths and future representations under s 4), confirm it is in trade or commerce, identify the relevant audience/class and whether it was led or likely to be led into error (Butcher; Campomar v Nike), and establish causation/reliance. It is the statutory counterpart to the common-law vitiating factors, examined where one party's conduct or representation misled the other.
What this chapter covers
- 011. ACL s 18 — no person, in trade or commerce, shall engage in misleading or deceptive conduct (or conduct likely to mislead)
- 022. Strict liability — no intent required; the focus is on the effect of the conduct
- 033. Identify the conduct — including silence/half-truths where disclosure is reasonably expected
- 044. Future representations — s 4 ACL: a future representation without reasonable grounds is misleading (onus on representor)
- 055. 'In trade or commerce' — the real-commercial-dealings character of the conduct
- 066. The relevant audience/class — ordinary/reasonable members (Campomar v Nike)
- 077. Was the audience led, or likely to be led, into error? Disclaimers (Butcher v Lachlan Elder)
- 088. Causation/reliance — the conduct must have caused the loss complained of
Misleading or deceptive conduct under ACL s 18 (Topic 16)
- 2 marksIssue. Has Verde contravened s 18 ACL?
- 3 marksRule. Section 18 ACL prohibits conduct, in trade or commerce, that is misleading or deceptive or likely to mislead/deceive (strict liability). Analyse: (1) conduct (including silence/future representations — s 4); (2) 'in trade or commerce'; (3) the relevant audience and whether it was led/likely to be led into error (Butcher v Lachlan Elder; Campomar v Nike); (4) causation/reliance.
- 4 marksApplication. Labelling imported tea '100% Australian-grown' is conduct in the trade or commerce of selling tea; the relevant audience is Kettle (and downstream consumers), who would be led into error about provenance — clearly misleading; Kettle relied on the representation in buying. A disclaimer (cf Butcher) appears absent, so nothing cures the representation.
- 3 marksConclusion. Verde has likely contravened s 18 ACL; Kettle can pursue the statutory remedies (s 236 damages and s 237/243 orders) covered in the next chapter.
Key terms
- ACL s 18
- Section 18 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)): a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. It imposes strict liability and is the central statutory counterpart to common-law misrepresentation.
- Conduct
- What s 18 regulates — including positive statements, but also silence or half-truths where there is a reasonable expectation of disclosure, and representations as to future matters. The focus is on whether the conduct misled or was likely to mislead, not on the maker's state of mind.
- Future representation (s 4 ACL)
- A representation about a future matter. Under s 4 ACL, a future representation made without reasonable grounds is taken to be misleading, and the representor bears the onus of adducing evidence of reasonable grounds. This catches forward-looking promises and predictions.
- In trade or commerce
- An element of s 18: the conduct must have a trading or commercial character — it must occur in the course of real commercial dealings, not (for example) in a purely private or domestic transaction. It is a genuine threshold to address, not a formality.
- Relevant audience / class
- The group at whom the conduct is directed. The conduct is judged by its effect on ordinary or reasonable members of that class (Campomar v Nike), asking whether they were led, or were likely to be led, into error. The audience may be a sophisticated buyer or the general public, which affects the analysis (Butcher).
- Causation / reliance
- To recover, the applicant must show the misleading conduct caused the loss complained of — typically by reliance on the representation. Conduct that misled but caused no loss founds no damages claim, though other orders may still be available.
Misleading or Deceptive Conduct (ACL s 18) FAQ
What does ACL s 18 prohibit?
It prohibits a person, in trade or commerce, from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. It is strict liability, so no intention to mislead is required — the question is the effect of the conduct on the relevant audience. It is the statutory workhorse alongside the common-law vitiating factors and is frequently pleaded together with them.
Can silence be misleading conduct?
Yes. Silence or a half-truth can be misleading conduct under s 18 where there is a reasonable expectation of disclosure in the circumstances. The question is whether, by staying silent or telling only part of the story, the person created a misleading overall impression. Always check whether the facts involve a non-disclosure as well as a positive representation.
How are future or forward-looking statements treated?
Under s 4 ACL, a representation about a future matter made without reasonable grounds is taken to be misleading, and the representor bears the onus of showing it had reasonable grounds. So a forward-looking promise or prediction is not safe merely because it concerns the future — if there were no reasonable grounds for it, it can contravene s 18.
How do I identify the 'relevant audience' and apply it?
Identify the class the conduct was directed at, then judge the conduct by its effect on ordinary or reasonable members of that class (Campomar v Nike), asking whether they were led or likely to be led into error. The sophistication of the audience matters — a disclaimer or context that would protect against misleading a sophisticated buyer might not protect against misleading the general public (Butcher v Lachlan Elder).
How is this topic examined?
Through facts where one party's statement, label or silence misled the other in a commercial dealing. Run the s 18 checklist as IRAC: identify the conduct (including silence/future representations under s 4), confirm it is in trade or commerce, identify the relevant audience and whether it was led into error (Butcher; Campomar), and establish causation/reliance. Then point to the statutory remedies (next chapter). s 18 is commonly paired with the common-law vitiating factors on the same facts.
Exam move
Memorise the s 18 checklist as a fixed sequence and run it like a flowchart every time: conduct (positive statement, or silence/half-truth, or a future representation under s 4) → in trade or commerce → relevant audience (ordinary/reasonable members, Campomar) led or likely to be led into error (watch disclaimers, Butcher) → causation/reliance → contravention. Drill the points students most often drop: that s 18 is strict liability (so intention is irrelevant), that 'in trade or commerce' is a real element, and that silence and future representations both count. Keep the checklist diagram in your open-book kit, and remember to hand off to the remedies chapter (ss 236/237/243) once a contravention is made out. s 18 frequently runs alongside a common-law vitiating factor on the same facts, so flag both.
