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    Resellers - training and certification legal issues

    Thursday, March 31, 2011

    Advertising is a concept of fundamental importance to the success of most resellers and one that is governed by a myriad of legal and regulatory regimes. However, by taking relatively simple steps to ensure that advertisements do not breach applicable laws, resellers can avoid having to deal with claims brought by disgruntled customers and the Australian Competition and Consumer Commission (ACCC) later on down the track.

    The legal framework governing advertising can generally be found intertwined in both state and federal legislation that generally provides that false, misleading or deceptive conduct in advertising is illegal.

    Under the Trade Practices Act, “a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” The Trade Practices Act also prohibits a range of other activities including falsely representing that goods or services are of a particular standard, quality, value or grade composition style or model, or have a particular history or particular previous use; falsely representing that goods are new; that a particular person has agreed to acquire goods or services; representing that goods or services have sponsorship, approval, performance characteristics, accessorises uses or benefits they do not have; representing that the corporation has a sponsorship approval or affiliation that it does not have; making false or misleading representations as to the price of goods or services or concerning the availability of facilities for the repair of goods or of spare parts for goods; making false or misleading representations concerning the place of origin of goods, the need for any goods or services, or concerning the existence, exclusion or effect of any condition, warranty, guarantee, right to remedy.

    It is important to note that the courts have ruled that whether advertising is misleading or likely to mislead depends not on whether the advertiser intends to mislead, but rather whether the advertisement would mislead the “ordinary consumer”. This means that particular types of advertising can be seen as misleading even when this is not the intention of the advertiser.

    Any kind of behaviour or conduct in business that could give a consumer the wrong impression may potentially be interpreted as a breach of relevant legislation. Some aspects of advertisements in which breaches of the legislation may more readily result include disclaimers and fine print; product safety problems; comparative advertising; two price advertising; a product's county of origin; characteristics and affiliation of products; and refunds.

    What is important to remember in advertising IT products is the principle of accurate, honest and full disclosure of all aspects of the product being marketed. Leaving out significant information on a product, or silence is often regarded as a key feature of misleading advertising and is regarded as such by the courts. If you are uncertain about the system requirements for a product you are selling or are unclear of the pros and cons of a particular product, it is best to seek clarification from the wholesaler or distributor, and optimal to receive such clarification in writing so that it can be used to rebut any subsequent claim brought against you.

    Disclaimer: This column is for general informational purposes only. It is not legal advice nor is it a substitute for legal advice. Readers should seek legal advice on their own particular circumstances. Alan Arnott is a technology & telecommunications lawyer with qualifications in computer science and law with Arnotts Lawyers Jones Bay Wharf in Sydney. For more information, please visit

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