Nicholas Kyriakoudes

Section 18 of the Australia Consumer Law (ACL) imposes a prohibition on natural persons and corporations who are engaged in trade and commerce to not mislead or deceive others. Broadly speaking the s 18 prohibition is aimed at preventing conduct from being engaged in which leads or is likely to lead a reasonable person into error. This means it is not necessary that a person is misled provided the impugned conduct is capable of misleading a reasonable person.

When does the prohibition become relevant?

The section 18 prohibition relates to conduct which occurs in “trade or commerce”. This phrase is not a term of art and is given its ordinary meaning so any conduct which bears a trading or commercial nature will fall within the s 18 prohibition.

Section 2(1) of the ACL further provides that the phrase trade or commerce “includes any business or professional activity (whether or not carried on for profit)”. Therefore, there is a broad range of activity which will be subject to the prohibition which extends not only to corporations engaging with other corporations but also to corporations engaging with natural persons, and natural persons engaging with other natural persons. The conduct which can be subject to a s 18 claim can extend to leasing arrangements, the sale of business or property, the advertisement of goods and services, or the provision of  goods or services (to name a few examples).

Intention and causation

The intention of the entity which breaches s 18 is not relevant. This accords with the general purpose of the prohibition which seeks to create fair trading and avoid unfair trading extending to unintentional unfairness. However, it is necessary that there is a nexus or connection with the impugned conduct and a person’s deception. This means that the conduct must cause a person to be misled (or the conduct can cause someone to be misled). A breach of s 18 will not occur where there is an erroneous assumption on the part of the person claiming to be misled or the person is merely confused by the conduct.

Conduct which may breach the prohibition

There is no exhaustive list of conduct which may breach s 18. But it is mindful to keep the prohibition in mind with the breadth of conduct which can fall under a trading or commercial nature. Often, conduct which breaches s 18 may also be breaching other provisions of the ACL such as those relating to false and misleading representations, bait advertising, and offering rebates.

Examples of conduct which can be misleading or deceptive include:

  • False use of another entities name.
  • Passing off another entity’s product as your own.
  • Providing false information to another person to induce them to purchase goods or services.
  • Providing forecasts or estimates with no reasonable grounds to support them.
  • Remaining silent in circumstances where there is a reasonable expectation of disclosure.
  • Providing half-truths or incomplete information.

If you would like to discuss your rights and obligations under the ACL, please contact us on 42 222 666 or at