CLAW1001 Chapter Notes - Chapter 20: Unit Price, Plaintext, Alternative Dispute Resolution
CHAPTER 20: ADVERTISING AND SALES PROMOTION
IMPROPER BUSINESS PRACTICES
• Ch 2 ACL General Principles: prohibits M/D conduct + unfair contract terms
• Ch 3 ACL Specific Protections: unfair practices (Pt 3-2), safety of consumer goods and product related services,
information standards, liability of manufacturers for goods with safety defects
ADVERTISING
• Hartnell v Sharp Corportation [1975]
o S fined $100 000 under TPA for falsely representing its microwaves had been approved – breach s53
o Significance: clear message that new standard of commercial morality required by TPA was very
enforceable
• Today, civil + criminal penalties up to $1.1 million for firms + $220 000 for individuals for ACL breaches
o Biggest penalty was $3.6 million in ACCC v Singtel Optus [2011] à misleading advertising
• Misleading advertising caught by s 18 ACL + specific misrepresentations in s 29, 30, 31, 33, 34, 37
o Not restricted to advertising
• Specific false representation provisions:
o Goods and services: s 20
§ G/S are of a particular standard, quality, value, grade etc. or have particular history
§ Goods are new
§ Particular person has agreed to acquire goods
§ Price of goods or services
§ Place of origin of goods
§ Availability of facilities for repair of goods
§ Existence, exclusion or effect of any condition, warranty, guarantee, right or remedy
§ Concerns any actual or implied requirement for a person to pay for contractual right equivalent
to a statutory consumer guarantee etc. etc.
o Land: s30 à prohibits a range of specific false representations
o Employment: s21 à prohibits conduct liable to mislead a person as to availability, nature, terms,
conditions or any other matters in relation to employment
o Nature etc of goods: s33 à nature, manufacturing process, characteristics and suitability for purpose or
quantity of goods
o Nature etc of services: s34 à nature, characteristics, suitability for purpose or quantity of S
o Business activities: s37 à concerning profitability, risk or other key aspect of business activities
• Defences: criminal but not civil proceedings
o Reasonable mistake of fact – ACL s207
o Act or default of another person beyond defendant’s control despite reasonable precautions – ACL s208
o A person whose business it is to publish advertisements, with no reason to suspect that publication of the
ad would amount to a contravention – ACL s209
• ACCC v Coles Supermarkets Australia Pty Ltd [2014]
o Promoted bread products as “baked today, sold today” and “freshly baked in store” à in fact partially
baked and frozen off site, and finished in store on the day they were offered for sale
o Contravened s18 of ACL (misleading conduct), s29 (false or misleading representation that goods have
particular history), s23 (misleading conduct as to nature…of goods)
§ Pecuniary penalty of $2.5 million
• Bait advertising: prohibits bargain offers being used as “bait” to attract customers and sales in circumstances
where the bargain is illusory à s35
o Advertisers of goods must be able to supply G/S at specified price for a reasonable time, and in
reasonable quantities
• Country of origin claims: s29 (i)(k) prohibits false or misleading representations concerning place of origin
o Made in claims: requires goods must have been substantially transformed in the COO claimed, and 50%
or more of costs to produce goods must have occurred there
o Product of claims: requires each significant component or ingredient originated there, all or almost all
production took place there
o Grown in claims: same as above ^^^^^
• Substantiation of advertised claims: ACCC has power to issue substantiation notices à 21 days to respond
SELF-REGULATION OF ADVERTISING
• Consumer complaints:
o Matters of taste and decency: If ASB upholds complaint, advertiser is requested to modify/discontinue ad
o Authority rests on industry’s voluntary adherence to self-determined standards
• Competitor complaints:
Document Summary
Advertising: hartnell v sharp corportation [1975, s fined 000 under tpa for falsely representing its microwaves had been approved breach s53, significance: clear message that new standard of commercial morality required by tpa was very enforceable. Specific false representation provisions: goods and services: s 20. G/s are of a particular standard, quality, value, grade etc. or have particular history. Availability of facilities for repair of goods. Existence, exclusion or effect of any condition, warranty, guarantee, right or remedy. Concerns any actual or implied requirement for a person to pay for contractual right equivalent to a statutory consumer guarantee etc. etc. Substantiation of advertised claims: accc has power to issue substantiation notices 21 days to respond. Debt collection agency + agent engaged in undue harassment, coercion and misleading conduct. Pyramid selling: person makes payments with prospect of receiving payments for introduction of others to scheme: must be distinguished from multi-level marketing schemes.
