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Which of the following would be most likely to breach s 18(1) of the ACL? Select one: a. A statement made to a prospective purchaser of a business that a coffee cart sells 300 coffees per day, even though 90% of the coffee cart’s customers work for Big Bank and Big Bank is moving its offices to another town in two day’s time. b. A promise to deliver more new icecream flavours every week if the new flavours are not then delivered. c. A statement that half a glass of Awesome Apple Fizz a day keeps the doctor away. d. A prediction that the area that a house is in will experience a huge increase in popularity in the next year, which does not eventuate.

Question

Which of the following would be most likely to breach s 18(1) of the ACL?

Select one:

a. A statement made to a prospective purchaser of a business that a coffee cart sells 300 coffees per day, even though 90% of the coffee cart’s customers work for Big Bank and Big Bank is moving its offices to another town in two day’s time.

b. A promise to deliver more new icecream flavours every week if the new flavours are not then delivered.

c. A statement that half a glass of Awesome Apple Fizz a day keeps the doctor away.

d. A prediction that the area that a house is in will experience a huge increase in popularity in the next year, which does not eventuate.

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Solution

The correct answer is:

a. A statement made to a prospective purchaser of a business that a coffee cart sells 300 coffees per day, even though 90% of the coffee cart’s customers work for Big Bank and Big Bank is moving its offices to another town in two day’s time.

Here's why:

Under the Australian Consumer Law (ACL), businesses are prohibited from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive (s 18(1)). This includes making false or misleading representations about future matters.

In this case, the statement that the coffee cart sells 300 coffees per day could be considered misleading or deceptive because it creates the impression that this level of sales will continue in the future. However, the fact that 90% of the coffee cart’s customers work for Big Bank and Big Bank is moving its offices to another town in two day’s time means that this level of sales is unlikely to continue. Therefore, this statement could breach the ACL.

The other options are less likely to breach the ACL. A promise to deliver more new icecream flavours every week (option b) could potentially be misleading or deceptive if it is not fulfilled, but it is less clear-cut than option a. A statement that half a glass of Awesome Apple Fizz a day keeps the doctor away (option c) is likely to be seen as puffery rather than a serious claim. A prediction that the area that a house is in will experience a huge increase in popularity in the next year (option d) could potentially be misleading or deceptive if there were not reasonable grounds for making the prediction, but again, it is less clear-cut than option a.

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