Defences To Misleading And Deceptive Conduct For Australian Businesses

Most business owners don’t set out to mislead anyone. You’re trying to sell your product or service, win customers, and stand out in a crowded market.

But marketing moves fast, websites change often, staff make sales calls, and suppliers give you specs you rely on. Before you know it, a customer (or competitor) alleges your business engaged in misleading and deceptive conduct.

In Australia, misleading and deceptive conduct claims are common because the core rule is broad, and it applies across industries. The good news is: even if a claim is made, you may have options. Understanding common defences and responses to misleading and deceptive conduct can help you respond strategically and protect your business.

Below, we’ll break down what misleading and deceptive conduct is, what the typical claims look like, and the key defences (and practical risk-reduction steps) Australian businesses should know.

What Is Misleading And Deceptive Conduct In Australia?

Misleading and deceptive conduct is primarily regulated by the Australian Consumer Law (ACL). The rule is intentionally broad: businesses must not engage in conduct that is misleading or deceptive, or likely to mislead or deceive.

This doesn’t only apply to obvious “false advertising”. It can include:

• statements on your website or in ads
• product descriptions and specifications
• quotes, estimates, and invoices
• sales pitches and verbal promises made by staff
• comparisons to competitors
• omissions (leaving out important qualifying information)
• overall impressions created by images, layout, headlines, or testimonials

Importantly, you can be liable even if you didn’t intend to mislead. That’s why prevention is critical - and why, if a claim arises, you’ll want to understand what you can argue in response.

If you want a deeper explanation of how the rule works in practice, it helps to understand the elements of misleading or deceptive conduct and how courts assess the “overall impression” your business creates.

Why Small Businesses Get Caught Out

Some common “real world” situations we see include:

• Overconfident marketing: “Guaranteed results”, “fastest”, “best”, “100% compliant”, without a solid basis.
• Supplier reliance: you repeat a manufacturer claim (e.g. waterproof rating, origin, capacity) that turns out to be wrong.
• Website leftovers: old pricing, outdated “sale ends tonight” banners, or a discontinued feature still listed online.
• Staff promises: someone in sales makes a promise to “close the deal” that your business can’t actually deliver.
• Silence on key limitations: the fine print exists, but the headline message creates a different impression.

This is why it’s not enough to be “generally honest”. Your systems, documents, and marketing approval processes matter.

When Can A Business Rely On Defences To Misleading And Deceptive Conduct?

It’s important to be clear about language here: in many ACL matters, people talk about “defences”, but often what you’re really looking at are:

• arguments that the conduct was not misleading (based on context, audience, disclaimers, or how a reasonable person would interpret it)
• arguments that the other party didn’t rely on the conduct (or didn’t suffer loss because of it)
• arguments that reduce liability (for example, apportionment and contributory conduct)

So, rather than thinking “I need one magic defence”, it’s usually about building a set of arguments that either:

• knock out the claim entirely, or
• reduce the damages, the scope of orders, or your exposure.

The right strategy depends on what was said, who it was said to, what documents exist, and what the other party actually did after hearing it.

Key Defences (And Practical Arguments) Businesses Use In Misleading And Deceptive Conduct Claims

Below are some of the most common defences to misleading and deceptive conduct (or closely related arguments) that Australian businesses may rely on. Not all of these will apply in every case, and they often work best in combination.

1. The Conduct Was Not Misleading When Read In Context

Misleading and deceptive conduct is assessed by looking at the overall impression created, in context.

That means the same statement can be misleading in one situation and not misleading in another, depending on factors like:

• where it appeared (headline ad vs detailed proposal)
• what was said immediately before/after
• whether qualifications were clear and prominent
• the nature of the audience (general consumers vs sophisticated business buyers)

A common defence is to show that, when the statement is read properly (including any clear qualifiers), a reasonable person in that audience would not be misled.

Practical tip: If your customer-facing documents are inconsistent (for example, your website says one thing but your contract says another), your risk goes up. Well-drafted Customer Contract terms can help you present key limitations clearly and consistently.

2. The Statement Was Opinion Or “Puffery”, Not A Factual Representation

Some statements are clearly opinions, sales talk, or marketing “puffery” rather than factual promises - for example, “best coffee in town” or “premium service”. These statements are less likely to be treated as misleading representations of fact.

However, this is not a free pass.

• If an “opinion” implies you have a reasonable basis (and you don’t), it can still be misleading.
• If it’s specific enough (e.g. “you will save 30% on power bills”), it looks more like a factual claim.
• If you present it as an expert assessment, the standard can be higher.

Practical tip: Be especially careful with “results” claims in industries like health, wellness, finance, marketing, training, and professional services.

3. You Corrected The Misunderstanding Promptly (And The Customer Didn’t Rely On The Earlier Statement)

Another common line of defence is that even if something was initially unclear, the customer was corrected before they made their decision - meaning they didn’t rely on the allegedly misleading conduct when entering the contract.

This argument works best when you can point to evidence like:

• an email clarifying the point
• a revised quote or proposal
• meeting notes confirming what was actually agreed
• a contract clause that clearly sets out the correct position

In practice, this is why documenting changes matters. If your business is regularly negotiating price, scope, deliverables, timelines, or inclusions/exclusions, it’s worth having a solid process for contract variations (even a simple “variation in writing” step).

4. The Other Party Didn’t Rely On Your Representation

Even if a statement was misleading, many claims still turn on reliance and causation. In other words, the claimant generally needs to show your conduct caused them loss.

If you can show they didn’t actually rely on what you said, you may reduce or defeat the claim. For example:

• they did their own independent checks and made the decision based on that
• they already knew the true position
• the representation didn’t play a real role in their decision

This defence often comes down to facts and evidence. Your internal records (and the other party’s records) can matter a lot here.

5. The Loss Was Not Caused By The Conduct (No Causation)

Even if the other party relied on something you said, you can sometimes argue that the loss they’re claiming wasn’t caused by the representation - for example:

• their business failed due to unrelated market changes
• they used the product incorrectly or outside specifications
• their own decisions (or third-party actions) were the real cause of the loss

This is a common point in disputes where the claimant is seeking broad damages that go beyond the direct impact of what was said.

6. The Claimant Contributed To The Loss (Contributory Conduct / Apportionment)

In some misleading and deceptive conduct matters (particularly where multiple parties are involved, or where the claimant’s own actions played a role), the court may reduce damages to reflect contributory conduct.

Examples that can lead to reduced liability include where the other party:

• ignored clear warnings or instructions
• failed to take reasonable steps to verify key information in a high-value transaction
• misused the goods or services
• withheld information you needed to advise them properly

This doesn’t mean “the customer should have known better” is always a defence. But in business-to-business transactions, especially where the buyer is experienced or advised, it can be an important factor.

7. Reasonable Grounds For Future Matters (Where The Representation Was About The Future)

Many disputes involve predictions: “you’ll get this result”, “this will be approved”, “this will ship by X date”, “this will generate Y leads”. These can be treated as representations about future matters.

A key issue becomes: did you have reasonable grounds for making the statement at the time?

If you can show you had a reasonable basis (for example, historical data, supplier confirmations, past performance, a properly prepared project plan), you are in a stronger position. If you had no reasonable basis, you’re exposed.

Practical tip: If you’re going to make future-facing claims, build a habit of recording the basis for those claims (even a short internal note can help later).

Common High-Risk Areas For Misleading And Deceptive Conduct (And How To Reduce Your Exposure)

Even if you have strong arguments available, disputes are time-consuming and expensive. The best strategy is usually to lower the risk of a claim arising in the first place.

Here are some areas where small businesses are most exposed - and practical steps you can take now.

Advertising, Websites And Sales Funnels

This is often where misleading impressions are created, even unintentionally.

• Make sure pricing is clear (including what’s included and excluded).
• Avoid “limited time” or “sale ends” claims unless they are true.
• Ensure testimonials and reviews are accurate and not misleading by omission.
• Be careful with “before and after” images and comparative claims.

If your business sells online, clear website terms can help manage expectations and reduce disputes. For many businesses, Website Terms and Conditions are a practical foundation for this.

Quotes, Estimates And Scope Creep

A lot of claims arise because the customer thought they were buying one thing, but you thought you were delivering another.

• Clearly label quotes as fixed-price vs estimate.
• Write down assumptions (e.g. “price assumes standard access” or “excludes council fees”).
• Use written approvals for changes to scope or timelines.

If you’re ever unsure whether a quote creates legal obligations, it’s worth understanding when a quotation is legally binding so you can tighten up your quoting process.

Staff Training And Scripts

What your staff say is often treated as what your business says. This is especially important for:

• sales teams
• front-of-house staff
• customer support
• social media managers

Practical steps that help:

• provide approved scripts for common claims (returns, results, timelines)
• train staff to avoid “guarantee” language unless authorised
• escalate unusual promises for written confirmation

Clear role expectations and onboarding also reduce risk when you have employees creating content or making customer promises. Proper documentation like an Employment Contract can support this by setting boundaries and responsibilities (including compliance expectations).

Online Reviews, Influencers And Affiliates

If you use influencers, affiliates, or brand ambassadors, you need to think about the claims they’re making on your behalf. If they overstate what your product does, your business can still be dragged into the dispute.

At a minimum, you should ensure:

• claims are consistent with what you can substantiate
• any required disclosures are made clearly
• there’s a written agreement setting the rules and approvals process

Privacy And Data Handling Statements

Misleading and deceptive conduct isn’t only about your product. It can also apply to what you say about your business practices - including how you handle customer data.

For example, saying “we never share your data” when you use third-party tools that require sharing could create issues.

If your business collects personal information online (even just an email list), you’ll usually want a Privacy Policy that accurately reflects what you do in practice.

What To Do If Your Business Is Accused Of Misleading And Deceptive Conduct

If you receive a complaint, demand letter, or claim, it’s normal to feel defensive - but your first steps matter. A rushed response can create new problems or weaken your position.

1. Preserve Evidence And Stop Potentially Risky Conduct

Before changing everything, preserve copies of:

• web pages (including screenshots and dates)
• ads and marketing materials
• sales emails and proposals
• call notes or CRM logs
• contracts, purchase orders, and variations

Then consider whether you should pause the specific ad or claim while you investigate. Continuing to run potentially misleading marketing can increase exposure.

2. Work Out Exactly What Representation Is Being Alleged

Misleading conduct claims often start broadly (“your marketing was misleading”). You’ll want to narrow it down:

• What exactly was said or shown?
• Where was it said (website, email, phone call, brochure)?
• Who said it (staff member, contractor, influencer)?
• What time period?

This helps you assess which of the defences to misleading and deceptive conduct might actually apply.

3. Check What The Customer Actually Relied On

This is where many businesses either strengthen or weaken their position. Look for evidence about what mattered to the customer when they made the decision:

• Did they ask questions about the exact point now in dispute?
• Did they mention they relied on a particular ad or promise?
• Were there disclaimers or clarifications they received and accepted?

4. Review Your Contracting Position

Contracts don’t automatically wipe out ACL obligations, but they are still crucial evidence of what was agreed, what was disclosed, and what limitations were communicated.

If your contracts are unclear (or you don’t have them), disputes are more likely to escalate.

5. Get Advice Before You “Settle” Or Admit Fault

Many matters settle quickly once both sides understand the strengths and weaknesses of the claim. But settlement wording matters, and admissions can have flow-on consequences (including with insurers, regulators, or other customers).

Getting legal guidance early can help you respond firmly but commercially, while protecting your long-term position.

Key Takeaways

• Misleading and deceptive conduct under the Australian Consumer Law (ACL) can apply to ads, websites, sales calls, quotes, and even omissions - not just obvious “false advertising”.
• Because the rule is broad, the best approach is to build systems that prevent misunderstandings (clear marketing approvals, staff training, and consistent customer documentation).
• Common defences and responses include showing the conduct wasn’t misleading in context, that it was opinion/puffery, that the customer didn’t rely on it, or that the alleged loss wasn’t caused by it.
• In some cases, liability can be reduced where the claimant contributed to their own loss or where multiple parties were involved.
• Strong contracts, accurate website terms, and clear privacy statements are practical tools that can reduce risk and improve your position if a dispute arises.

If you’d like help responding to a misleading and deceptive conduct complaint or tightening up your marketing and customer terms to reduce risk, contact Sprintlaw on 1800 730 617 or email team@sprintlaw.com.au for a free, no-obligations chat.