LAWS6991 Chap.12 Misrepresentation and Misleading or Deceptive Conduct
Misrepresentation and Misleading or Deceptive Conduct
This chapter covers false statements and misleading conduct. Common law misrepresentation needs an untrue statement of existing fact that induced the contract, and silence generally does not count. Section 18 of the Australian Consumer Law prohibits conduct in trade or commerce that is misleading or deceptive or likely to be.
Concrete Constructions confines trade or commerce, Demagogue v Ramensky governs silence, Parkdale requires error rather than confusion, and Butcher v Lachlan Elder tests disclaimers. Section 4 treats unsupported predictions as misleading, and sections 232 to 243 supply remedies.
What this chapter covers
- 01
Elements of misrepresentation
- 02
Silence and half-truths
- 03
Section 18 prohibition
- 04
Trade or commerce
- 05
Conduct and silence
- 06
Misleading or deceptive
- 07
Future matters under section 4
- 08
ACL remedies
Worked example · free
A half-truth in a business sale
- 1Revenue at risk: 40% of $480,000 is $192,000 a year, assuming cancelled members paid average fees.
- 1The seller is in trade or commerce when selling her business, so section 18 applies to her conduct.
- 1Silence is misleading only where the circumstances lead people reasonably to expect disclosure; a true revenue figure given while concealing a sharp recent fall is a half-truth that creates that expectation.
- 1The conduct was likely misleading, and the buyer can seek damages under section 236 for loss caused, and orders such as variation or refund under section 243.
Key terms
- Misrepresentation
- An untrue statement of existing fact, made to induce a contract, that does so.
- Representor
- The person who makes a representation to another party.
- Half-truth
- A statement that is literally true but misleading because of what it leaves out.
- Expected disclosure
- A setting in which the other party would reasonably expect to be told, so that silence can mislead under section 18.
- Future matter
- A prediction or promise about the future, treated as misleading under section 4 without reasonable grounds.
- Disclaimer
- A statement limiting responsibility for information, relevant to how a reasonable person would read the conduct.
Misrepresentation and Misleading or Deceptive Conduct FAQ
What are the elements of misrepresentation at common law?
An untrue statement of existing fact by the representor, intended to reach and induce the representee, which does induce entry into the contract. Opinions, predictions and puffery are generally excluded, and the representee usually bears the onus of proving inducement.
Can staying silent be misleading?
At common law there is generally no duty to disclose, subject to exceptions such as half-truths. Under section 18, silence is misleading only where the circumstances lead a person reasonably to expect disclosure, as Demagogue v Ramensky explains.
What does trade or commerce mean in section 18?
Section 2(1) covers business or professional activity, profit-making or not. Concrete Constructions limits it to conduct that is itself trading or commercial, so purely private conduct falls back on common law misrepresentation.
When is conduct misleading or deceptive?
When it leads, or is likely to lead, a person into error, not merely confusion, as Parkdale v Puxu held. For the public, ask about a reasonable member of the class; for individuals, consider what each knew of the other.
Does a disclaimer stop a section 18 claim?
Not automatically. Butcher v Lachlan Elder shows that the disclaimer, the nature of the parties and what each knew all bear on whether the conduct, viewed as a whole, was misleading to the person dealing with the agent.
Who benefits from section 4 on future matters?
The claimant. Section 4 treats a prediction made without reasonable grounds as misleading and presumes no reasonable grounds unless the maker adduces evidence, though producing evidence does not itself prove the grounds were reasonable.
Exam move
Revise misrepresentation and section 18 side by side, because problems often require you to choose between them. Start every answer by asking whether the conduct is in trade or commerce. Then identify the conduct precisely, including any silence, test it against the audience, and only then turn to loss and remedy. Learn the remedy sections by number, since examiners expect them.
For predictions, remember that section 4 shifts the evidential burden to the maker. Ask Sia to set mixed private and business scenarios and check which regime you choose.
Working through Misrepresentation and Misleading or Deceptive Conduct in LAWS6991? Sia is AskSia’s AI Law tutor — ask any LAWS6991 Misrepresentation and Misleading or Deceptive Conduct question and get a clear, step-by-step explanation grounded in how LAWS6991 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.
