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The fine line of puffery!

 

Puffery refers to exaggeration in the course of selling product or services to consumers. The Australian Consumer Law, Australian Competition and Consumer Act 2010, section 18 of Schedule 2 of the Act does not prohibit the seller of making grandiose claims in order to sell to the consumer, unless those statements will reasonably mislead or deceive the consumer. 

 

In Stuart Alexander & Co (Interstate) Pty Ltd v Blenders Pty Ltd (1981) the court said: 

 

… a robust approach is called when determining whether television commercials of this kind are false, misleading or deceptive. The public is accustomed to the puffing of products in advertising. 

 

Misleading or deceptive claims based on a level of puffery will be scrutinised by the court carefully.  In Everyday Australia Pty Ltd v Gillette Australia Pty Ltd (2000) the court found: 

 

… the words “lasts up to four times longer” hold out of the view that Duracell batteries do offer a meaningful advantage over competing brands. The specificity of these words is inconsistent with the nature of advertising puff. To my mind it is misleading and deceptive to appear to a reasonable television viewer to be saying something meaningful on which the viewer is invited to rely as a basis of action…

 

Where there are flamboyant or alluring statements about the quality of realestate this will not be misrepresentation if it is the opinion of the agent saying it, which is the arguable point of puff. However, where the comments made are a statement of fact and it is not true what has been stated, this will be misleading and/or deceptive conduct.  

 

In Collier Constructions Pty Ltd v Foskett Pty Ltd (1990) a statement was made, which said, if you don't get the builder [respondent to the claim] to build your new home you will not be getting the best deal. The court held this statement did not breach the Trade Practices Act section 52, which is now the Australian Consumer Law, Australian Competition and Consumer Act 2010, section 18 of Schedule 2, because there was many factors that depended on certain events to occur before the statement could be misleading. 

 

In Byers v Dorotea Pty Ltd (1986) the statement by the agent that the apartment being viewed by the applicant was bigger and better than their own present apartment, was misleading, as the statement by the agent gave an impression that the new building was on a grander scale than the one they presently lived in, which was false. 

 

Claims that puffery is misleading will depend on the facts off each case. In General Newspapers Pty Ltd v Telstra Corp (1993) the court said: 

 

In the ordinary course of commercial dealings, a certain degree of puffing or exaggeration is to be expected. 

 

In Prosperity Group International Pty Ltd v Queensland Communications Company Pty ltd (No 3) [2011] the court said, the claim that puffery applied to statements made to encourage the applicant to enter into a rental agreement, was not puffery. The statements made to entice the applicant to enter the rental agreement were misleading. 

 

In Gillette Aust Pty Ltd v Energizer Aust Pty Ltd [2005] the court held that a statement saying that the respondent’s batteries were the worlds longest lasting battery was not puffery, and misleading. 

 

In ACCC v Kaye [2004] the court held that statements made in advertisements that by investing in real estate the purchaser would become a millionaire were not puffery, and misleading. 

 

Puffery statements may be positioned on a fine line with breaching the Australian Consumer Law, Australian Competition and Consumer Act 2010, under section 18 of Schedule 2 of the Act. Where a party wants to bring a claim for misleading or deceptive conduct, careful analysis is required to determine the merits of commencing a claim, especially where puffery may be argued as a defence. All claims will be based on the facts, so before raising allegations, get that legal advice to protect your legal rights and interests. 

 

The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799 www.legalau.com 

 

Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”