Every business was created to make a profit. Managers are instructed by business owners to do whatever they can to achieve this goal. To protect consumers from over aggressive desires of corporations to make money, the law has set out standards that the companies must adhere to. “Laws prohibiting misleading or deceptive conduct by businesses are critical to ensuring that markets operate as efficiently as possible so as to deliver the maximum benefits to consumers. ” This statement appears to be accurate given that the law punishes misleading conduct for the benefit of the public.
The Australian Competition and Consumer Commission says that misleading or defective conduct does not have anything to do with the intent of the corporation, but rather, it is all about the consumers’ perception of the business’s representations. “If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the conduct is likely to breach the law (Australian Competition and Consumer Commission).
” Misleading or deceptive behavior applies to a variety of situations involving a contract or an agreement. For the purposes of this paper, misleading or deceptive behavior shall be examined in the point of view of seller-consumer relationship. Given the Australian Competition and Consumer Commission’s definition, from a fair man’s point of view, the law is very aggressive against the business corporations, almost taking into consideration the consumers’ side only of the circumstances. As such, the law has provided a platform wherein to judge misleading or defective conduct.
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In the case of Truth About Motorways Pty Ltd. vs. Macquarie Infrastructure Investment Management Ltd. , Justice McHugh said, “What is sought to be established by the determination of a court is a violation by the respondent of a statutory norm of conduct, and the existence of a duty or liability. (Consumer Affairs Victoria, p. 3)” The law not just only relies on consumers’ representations against a business but also looks whether there are really damages, breach of duty or liability due to a person by a corporation from his claims.
The law prohibiting misleading or deceptive conduct is all about consumer protection. It essentially backs the old adage saying the “customer is always right”. With these laws, the consumers are always protected from different business tricks. For instance, the corporation cannot make aggressive representations on its advertisements. In countries where no such law for misleading or defective conduct, blatant advertising campaigns are considered to be acceptable forms of fraud. A company can easily say that a product can do miracles when it actually cannot and such statement is impossible.
Laws prohibiting misleading or deceptive conduct will limit such claims of a company on a product to keep expectations by consumers to be realistic. Giving the consumer the right to cry “Wolf! ” in almost every aspect of business negotiations can also considerably boost business ethics in the region. The corporations are well aware that they are the automatic suspect in any allegation and given that most of the time, they are the ones with means to perpetrate a good cover-up, they are simply forced to behave by the law. On the downside, the law against misleading or deceptive behavior is very one-sided.
The law should always be fair to everyone, as this is the statute among a nation that is being discussed. A customer, as much as the corporation, will want personal gain in the business dealing. He can easily go to any court claiming dissatisfaction to a particular service and lie outright and say that the business has perpetrated misleading conduct though the business has actually been very fair in the matter. With every consumer demanding remuneration from every imagined slight or injustice by a business organization, the courts will be swamped with complaints and cry for justice.
There are different examples of misleading or deceptive behavior: 1. “Knowingly making a false statement (The ‘Lectric Law Library)” – by knowingly making a false statement the company is already perpetrating fraud given that there is malicious intent in his statement. By knowingly making a false statement, the corporation is committing a crime against the person knowing that the person will rely on his misrepresentations, causing the person to lose something valuable in the trade and the corporation to gain. 2.
“Intentionally omitting information (The ‘Lectric Law Library)” – “What you don’t know won’t hurt you” is not something that will apply to this prohibition. The act of silence can lead to misrepresentation. Generally, by omitting material information that would greatly affect the negotiations is considered deceptive behavior. In a contract, all material aspects about the object must be disclosed, the same way all details of the tender of payment must be stated. Not disclosing the all information vital to the execution of the contract may be considered deceptive as one party may not have entered to the same contract knowing this information.
3. “Inviting reliance to an item that lacks authenticity (The ‘Lectric Law Library)” – this is another form of fraud because one of the parties sought out another with the intent to deceive. Upon discovery, the other party’s remedy is to press charges against the perpetrator. 4. “Using trick, scheme or device with the intent to mislead (The ‘Lectric Law Library) – again, given that the intent to deceive is present, this is another form of fraud that can easily be classified criminal behavior. The offended party must press charges upon discovery.
Should the intent not be present, misleading behavior is still punishable because the other party would not have entered into the agreement should the offending party not committed such act. Misleading or deceptive behavior applies to a variety of agreements. In my personal point of view, laws preventing such behavior lead to the overall credibility of the market. The market should be fair and square, in terms of competition. With this law, the competitors in the industry will be honest in terms of getting their products out in the market.
This benefits the consumers because no business will attempt to defraud them just to gain competitive advantage over another company that sell the same products or services. The consumers will have a clear-cut, unobstructed view of the products and services being offered by the different sellers and decide for themselves which they want best. Added to this, the sellers must simply devise ways on how not to mislead their consumers in thinking that what they offer is the best amongst the market. There will be clean and healthy competition within the industry.
As for being a consumer, I understand that the laws on misleading or deceptive behavior are essentially created to protect me from what was done before: ‘caveat emptor’. Today, the buyer need not beware because the sellers are being honest in their trade because the law disallows them to be otherwise. A buyer is benefitted because he gets the best value for his money and he can easily return a product that is not as the manufacturer has claimed it to be. Works cited: Australian Competition and Consumer Commission.
“Misleading & deceptive conduct. ” 2009. Web. 21 May 2010. <http://www. accc. gov. au/content/index. phtml/itemId/815335#h2_17> Consumer Affairs Victoria. “Guidelines on false, misleading and deceptive provisions of the Fair Trading Act 1999. ” 2005. Web. 21 May 2010. < http://www. consumer. vic. gov. au/CA256902000FE154/Lookup/CAV_Publications_Fair_Trading/$file/guidelines_misleadingdeceptive. pdf> “misleading conduct”. Definition. The ‘Lectric Law Library. n. d. Web. 21 May 2010. <http://www. lectlaw. com/def2/m033. htm>
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