Newsletter - July 2010

A Company may contravene the Trade Practices Act 1974 (Cth) if it publishes an opinion furnished by a third party to the world at large or at least to a section of the public and that opinion is misleading and deceptive (or likely to mislead or deceive)¹⁾.

If the company publishing the opinion is regarded as having adopted that opinion it will be liable for same.

If the publication causes a person to suffer loss or damage, the publishing company can be liable to that person for damages²⁾ regardless of the publishing company’s honesty or dishonesty in publishing the opinion³⁾.

This risk may be reduced by the company stating that it is not the source of the information, expressly or impliedly disclaiming any belief in its truth or falsity and advising that the company is merely passing on the information for what it is worth⁴⁾.

The Court will consider the company’s conduct as a whole, including issues such as the use of disclaimers⁵⁾.

The Federal Court considered these issues in Granitgard P/L v Termicide Pest Control P/L (No.5)⁶⁾, a dispute between two competitor firms, both of whom supply termite barrier systems.

The CSIRO issued an appraisal of Termicide’s barrier system, which Termicide linked to from their website.

The Court interpreted Granitgard’s allegations to include that on the balance of probabilities, linking to or reproducing the CSIRO report gives rise to the inference that Termicide has adopted the contents of the report⁷⁾.

However, it was the Court’s opinion that the reproduction of and linking to the CSIRO report was not an adoption of that report by Termicide, but rather an invitation to the website user to read the report and form an opinion on Termicide’s own statements on its website⁸⁾.

The Court considered the presence of the CSIRO Appraisals logo on Termicide’s website to be an alert to the website user of CSIRO’s appraisal, not an implication that Termicide is adopting all or any of CSIRO’s opinions⁹⁾.

The Court may have adopted a different view had there been a direct or indirect suggestion by Termicide on its website that it had adopted CSIRO’s representations as its own¹⁰⁾.

The Court also ultimately found that the linked material was in any event, not misleading or deceptive.

As with all marketing material, you need to carefully consider whether the wording on your website is potentially misleading or deceptive. This is particularly important when you incorporate third party materials or include links to other websites, in which case it should be made clear that you are not adopting that third party’s representations as your own.

All marketing materials should be regularly reviewed to ensure that the descriptions of your goods and or services are up to date and correct.

It is also helpful if in your agreements with customers, there is an express clause stating that the customer has not entered into the agreement in reliance upon any marketing material supplied by you or other extrinsic material.