Issue:
Whether Joe has any right to get refund from the makers of Investor Plus?
Rule:
There are number of Australian business which use mode of advertisement for the purpose of promoting their goods and services. Organizations advertise through various modes such as through television, radio, the internet or print media, and it is the duty of business organizations to ensure that advertisement published by organization complied with the laws. Protection of consumers in Australia and fair trading is ensured through the Australian Consumer Law (ACL), and ACL is the part of the Competition and Consumer Act 2010 (the Act) (ACCC, n.d.).
ACL imposed duty on organizations to ensure that statements made by them must not be incorrect and does not create any false impression. This rule applied on the advertisement made by organization, packaging of product, and on information provided by the staff of the organization. Section 18 of the Australian consumer Law states provisions related to misleading and deceptive conduct. This section prohibits the misleading and deceptive conduct by business organizations.
As per section 18, a person must not in trade or commerce engaged in any such conduct which is misleading or deceptive or likely to mislead or deceive. Impact of this section is very wide in nature. This legislation caught the false advertising and any person can report for misleading and deceptive organization, but generally it is reported by ACCC and rival trader. This treatment mainly focuses on the contract-related effect of the legislation. In other words, misleading conduct is generally found at the time of the contract or during the contract (Hobart community, n.d.).
In lieu of contract law, Court adopts different behavior and reasons for allowing statutory misleading conduct. Usually, it is held that making promise and later not keeping that promise does not result in misleading conduct unless such promise was not genuinely made in the first place. It must be noted some type of promises such as about the performance or capability of a product, generated the liability under this legislation.
Generally, intention of the business does not matter, which means no matter whether business intended to mislead the customer or not. If overall impression made by advertisement published by business is misleading then such advertisement is misleading and deceptive in nature. In such cases, it is assumed that organization breaches the law by making misleading and deceptive advertisement (ACCC, n.d.).
This can be understood through example, there are number of organizations which usually made cash back offers in their advertisement, in store-promotions, and in retail sales staff. It is against the law for retailers and manufacturers to mislead and deceive the consumers by offering cash back deals through advertisement without intending to fulfill those deals. Such kind of behavior of traders and retailers are considered as contrary to section 18 of ACL (ACCC, n.d.).
In case TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190 and (No. 2) [2013] FCAFC 37, Court provides useful reminder to the business organizations who publish advertisements to ensure that qualifying statements accompanying headline representations must be conduct in prominent manner, so that it does not mislead the consumers.
Application:
In the present case, Joe purchased the investor plus software after seeing the advertisement in magazine. As per these advertisement makers of investor plus software states that if consumer uses this software as per the directions for six month then they will make 30% profit on their investment. They further state, that if this will not happen then makers will refund the purchase price and pay you $5000.00.
After six months Joe suffered loss of 20% on his investment even after using the software as per the directions. Joe made the request of refund from the makers of Investor Plus, but makers refused the refund and said that they cancel all the previous offers by publishing advertisement in the same magazine last month.
This can be understood through case law Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1. In this case Lord Lindley stated that there was express promise by company to pay £100 in particular events. Advertisement was not only a puff, and this conclusion was based on fact that advertisement published by company states that £1,000 was deposited with the bank and this fact shows the sincerity of the organization. No other fact was found which states that advertisement was mere a puff.
It must be noted that, advertisement published by company was considered as offer which state the payment to anyone who performed the stated conditions and performance of such conditions by any person was considered as acceptance of that offer.
In the present case also Joe accept the offer made by the makers of the Investor plus by purchased the investor plus software after seeing the advertisement in magazine. As per the general rule under Australian contract law it is not possible for offeror to revoke the offer once it is accepted by the offeree. On the basis of this general rule it can be said that there is valid contract between the Joe and makers of software, and it is not possible for makers of
As stated above, making promise and later not keeping that promise does not result in misleading conduct unless party who made the promise does not genuinely made the promise at the first place. In this case also makers promise to refund the cash but later they revoke the promise. Such behavior of makers will considered as misleading and deceptive conduct.
Conclusion:
After considering the above facts, it can be said that Joe can demand his refund from the makers of the Investor plus software.
References:
ACCC. Advertising and selling guide. Available at: https://www.accc.gov.au/accc-book/printer-friendly/29527. Accessed on 14th December 2017.
ACCC. Cash back offers. Available at: https://www.accc.gov.au/consumers/misleading-claims-advertising/cash-back-offers. Accessed on 14th December 2017.
ACCC. False or misleading claims. Available at: https://www.accc.gov.au/consumers/misleading-claims-advertising/false-or-misleading-claims. Accessed on 14th December 2017.
Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.
Competition and Consumer Act 2010- schedule 2- Section 18.
Hobart Community. Misleading or Deceptive Conduct under the ACL. Available at: https://www.hobartlegal.org.au/tasmanian-law-handbook/consumers-money-and-debts/australian-consumer-law/misleading-or-deceptive. Accessed on 14th December 2017.
TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190 and (No. 2) [2013] FCAFC 37.
