section 18 ACL deep dive: misleading or deceptive conduct explained

A business doesn't have to lie outright to break the law. Under the Australian Consumer Law, a technically true statement, a half-truth, a misleading image, or even a strategic silence can all amount to conduct that is misleading or deceptive — and give you enforceable rights. Section 18 of the ACL is one of the most powerful and frequently litigated provisions in Australian consumer law, and understanding how it works puts you in a much stronger position when a business has misled you into a purchase.

This article goes deeper than the basics. It explains what section 18 actually requires, how courts and tribunals have interpreted it, where it overlaps with the specific false-representation provisions in section 29, and what steps you can take if you think you've been misled.

Quick answer

Whether section 18 applies to your situation depends on several key variables: whether the conduct occurred in trade or commerce, whether a reasonable person in your position would likely have been misled or deceived, and whether you suffered loss as a result. The section does not require the business to have intended to mislead you — the test is objective. If those conditions are met, you may have a right to seek compensation or other remedies, though the strength of any claim will depend on the specific facts, including what was said, how it was said, and what you relied on.

What the law actually says

Section 18 of the ACL reads simply: a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

That's it. No list of prohibited statements, no requirement that the business knew it was misleading you, no requirement that you actually were deceived — only that the conduct was likely to mislead or deceive a reasonable person in your position. Courts have spent decades unpacking what that means, and the resulting body of case law is rich and consumer-friendly.

"In trade or commerce" — this phrase limits section 18 to conduct by businesses acting in a commercial context. A private individual selling their old couch on Facebook Marketplace is generally not acting in trade or commerce. A sole trader, a company, or a business of any size selling goods or services commercially almost always is. The test is whether the conduct is part of a commercial activity, not whether the person is a large corporation.

"Conduct" — section 18 covers far more than spoken or written statements. Conduct includes images, demonstrations, omissions (staying silent when you had a duty to speak), pricing displays, website descriptions, social media posts, and the overall impression created by a combination of elements. A car dealer who photographs a vehicle to hide rust is engaging in conduct. A hotel that posts photos of a view that no longer exists is engaging in conduct.

"Misleading or deceptive or likely to mislead or deceive" — the test is whether the conduct, viewed as a whole, would lead a reasonable person in the target audience into error. Courts ask: what overall impression does this conduct create? Is that impression false? The business doesn't need to have intended to mislead. A genuine mistake is still a breach if the conduct was objectively misleading. And "likely to mislead" means you don't even need to show you were actually deceived — only that the conduct had that tendency.

Half-truths and omissions — some of the most important section 18 cases involve statements that were technically accurate but created a false overall impression. Telling a buyer that a property "has development potential" without disclosing a known planning restriction that makes development impossible can be misleading, even though the words themselves weren't false. Similarly, a business that stays silent about a material fact — when a reasonable person would expect disclosure — may be engaging in misleading conduct by omission.

Section 29 — the specific false representations — section 18 is the general prohibition. Section 29 of the ACL lists specific types of false or misleading representations that are separately prohibited: false claims about the standard, quality, or grade of goods; false claims about price; false testimonials; misrepresentations about the need for goods or services; and others. A business that makes a false claim about a product's features may breach both section 18 and section 29. In practice, if your situation involves a specific false statement about goods or services, it's worth checking whether section 29 also applies — the remedies are similar, but section 29 can also attract criminal penalties for the business.

When this applies (and when it doesn't)

Section 18 is broad, but it has limits.

It applies when:

• A business (or person acting in trade or commerce) made a representation, created an impression, or stayed silent in circumstances where disclosure was reasonably expected.
• The conduct was objectively likely to mislead or deceive a reasonable person in your position.
• You suffered loss or damage as a result of relying on that conduct — this is required to claim compensation under section 236 of the ACL, though the ACCC can seek orders without proving individual loss.

It generally does not apply when:

• The conduct was by a private individual not acting in trade or commerce. Most private sales on platforms like Gumtree or Facebook Marketplace fall outside section 18, though the platform itself may be a different matter.
• The representation was clearly a puff or opinion that no reasonable person would treat as a statement of fact. "Australia's most comfortable mattress" is likely puffery. "This mattress is made from 100% natural latex" is a factual claim — if it's false, section 18 is engaged.
• You did not rely on the conduct, or your reliance was not reasonable in the circumstances. If you had independent expert advice that contradicted what the business told you, and you proceeded anyway, a court may find your reliance was not reasonable.
• The loss you suffered was not caused by the misleading conduct — causation is a required element for compensation claims.

A note on the ACL's consumer definition: section 18 is not limited to transactions that fall within the ACL's consumer definition (which covers goods and services acquired for personal, domestic, or household use, or below the $100,000 price threshold, and not acquired for re-supply or for use in a manufacturing or repair process). Section 18 applies to conduct in trade or commerce more broadly — it can protect small businesses that were misled, not just individual consumers. However, where the purchase falls within the ACL's definition of a consumer transaction, the full suite of ACL remedies is available alongside a section 18 claim.

What to do today

If you believe a business has misled or deceived you, the following steps will put you in the strongest position.

1. Capture the evidence now. Screenshots of websites, product listings, advertising, and social media posts can disappear. Save copies immediately, with timestamps if possible. Keep any emails, brochures, or written quotes you received before purchase.

2. Write down what was said. If the misleading conduct was verbal — a salesperson's claim, a phone conversation — write down as accurately as you can what was said, when, and who said it. Do this while the memory is fresh.

3. Identify the specific conduct. What exactly was the representation? Was it a written statement, an image, a demonstration, a silence? What impression did it create? How does that impression differ from reality? Being precise about this will make your demand letter much stronger.

4. Quantify your loss. Section 18 claims are about compensation for loss caused by the misleading conduct. What did you pay? What did you actually receive? What would you have paid (or done) if the truth had been disclosed? The difference between those figures is often the starting point for a compensation claim.

5. Write to the business. A written demand letter citing section 18 of the ACL, describing the specific conduct, and stating the loss you suffered is often enough to prompt a resolution. Be factual, specific, and measured. State what you are seeking — a refund, compensation, or correction — and give a reasonable deadline.

6. Use fairgo to draft the letter. If you're unsure how to frame the section 18 claim, fairgo can generate a demand letter for you in about 90 seconds. The wizard identifies the relevant ACL provisions automatically and produces a letter you send under your own name.

For real-world examples of what section 18 conduct looks like across different industries, see our section 18 examples article.

What if the business refuses

If the business does not respond or rejects your claim, you have several escalation options.

Your state or territory Fair Trading body is usually the first port of call. Each state and territory has a free conciliation service that can contact the business on your behalf. It is worth noting that the Fair Trading body does not itself make binding orders in ordinary consumer disputes and cannot compel the business to participate — but many businesses do engage, because ignoring a Fair Trading conciliation request looks bad if the matter escalates. Full contact details for every state and territory are at /agencies.

The ACCC investigates systemic or widespread misleading conduct — false advertising campaigns, industry-wide practices, or conduct affecting large numbers of consumers. The ACCC does not resolve individual disputes, but a complaint can contribute to a broader investigation. If your situation involves conduct that appears to be affecting many people, an ACCC complaint is worth making alongside your individual claim.

A state tribunal or court is where individual section 18 claims are typically resolved when conciliation fails. The correct binding forum depends on the nature and value of your dispute. For many ordinary ACL disputes, the Magistrates Court (or equivalent) is the appropriate forum for binding orders. State tribunals such as NCAT (NSW), VCAT (Victoria), QCAT (Queensland), and their equivalents may also have jurisdiction over certain ACL disputes where their enabling legislation confers it — but this is not automatic, and you should confirm the correct forum and current claim thresholds on the relevant official site before filing. See our guide to choosing the right tribunal or court for more detail.

In a tribunal or court, you would typically claim compensation under section 236 of the ACL for the loss you suffered as a result of the misleading conduct. In some cases, you may also be able to seek rescission of the contract — unwinding the transaction — if you can show you would not have entered into it had the truth been disclosed.

For property-related misleading conduct, the dynamics can be more complex — see our article on real estate misrepresentation for specifics on that context.

Common mistakes

Assuming intent is required. Many people give up on a section 18 claim because they think they need to prove the business deliberately lied. They don't. The test is objective — if the conduct was likely to mislead a reasonable person, the section applies regardless of what the business intended.

Focusing only on what was said, not the overall impression. Courts look at the overall impression created by the conduct, not individual sentences in isolation. A business that buries a crucial qualification in fine print after making a bold headline claim may still be engaging in misleading conduct, because the overall impression is false.

Confusing section 18 with the consumer guarantees. Section 18 is about being misled into a transaction. The consumer guarantees (sections 54–63) are about the quality and fitness of what you received. These are different causes of action, and sometimes both apply — for example, if a product was falsely described and also fails to work properly. Understanding which applies to your situation helps you frame the right claim. See our overview of consumer guarantees for the distinction.

Not quantifying the loss. A section 18 claim without a clear loss figure is much harder to pursue. "I felt misled" is not enough — you need to be able to say what you paid, what you actually got, and what the difference is worth.

Waiting too long. While the ACL does not set a single fixed warranty-style expiry period for section 18 claims, limitation periods under state and territory law generally apply to court proceedings. In most jurisdictions, a six-year limitation period applies from when the cause of action accrued — but delay can also make it harder to gather evidence and establish causation. Act promptly.

Going straight to the ACCC for an individual dispute. The ACCC's role is systemic enforcement, not individual dispute resolution. For your specific claim, Fair Trading conciliation and the relevant tribunal or court are the right paths.

For a worked example of how section 18 applies to holiday and accommodation bookings — a common source of misleading conduct complaints — see our holiday accommodation article.

Related reading

• section 18 misleading conduct — real examples across industries
• Real estate misrepresentation and the ACL
• Holiday accommodation and false advertising — your rights

This article is general information about Australian Consumer Law, not legal advice. The ACL is complex and your situation may have details that change the analysis. For advice on your specific case, see your state's Fair Trading body — full list at /agencies.