Lismore Lawyers business law faq's

Australia has comprehensive legislation governing fair trading.  The primary piece of legislation is the Trade Practices Act 1974 (Cth).  The Act primarily controls the commercial behaviour of corporations but extends to individuals in limited situations and to government departments and statutory authorities.

One of the key provisions in the Act is a prohibition against engaging in misleading or deceptive conduct, or conduct that is likely to mislead or deceive.  The Act also prohibits making false representations or claiming false affiliations or associations. 

Under the Trade Practices Act, relief is available if it can be shown that:

1. the conduct took place,
2. the conduct was misleading or deceptive, and
3. the aggrieved party relied upon the conduct or was induced by the conduct to do something, and as a result suffered loss.

The relief provisions of the Act are most often used by parties who have been misled by representations to enter into an agreement (for example, an incorrect representation regarding the past trading figures of a business).  Where the representation relates to a future matter, the position of the applicant is even stronger, as the representation is taken by the court to be misleading or deceptive unless the maker of the representation can show that, at the time it was made, they had reasonable grounds for doing so.

A wide range of relief is available, and courts may make orders for the payment of money by way of damages or reimbursement, an order terminating the agreement, or injunctive relief.

Because the Trade Practices Act only applies to situations coming within the Commonwealth's legislative authority, states enacted their own fair trading legislation which largely mirrors the consumer protection provisions in the federal Trade Practices Act.  In New South Wales the main law covering business behaviour is the Fair Trading Act 1987.  Under this Act is unlawful to make false claims about a product or service, operate in a misleading or deceptive way, or engage in unconscionable conduct (for example, by taking unfair advantage of vulnerable customers).