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Misleading ads
19/02/2008 The Star Articles of
Law By Bhag Singh
A buyer’s rights are governed by the contract entered into, and rarely by
the claims made in an advertisement.
ADVERTISEMENTS of products and services often catch our attention. Just as
often, the expectations created by the advertisements fall short of what is
offered or available.
When this happens, is there a basis to complain or seek relief? If so, to
whom can one complain to and what can the complainant expect? Is there any
remedy or relief that can be obtained for being misled by an advertisement?
A reader wrote in to say that he bought a condo unit in 2002 because the
developer had advertised in the newspaper that a lighted, covered walkway
would be built from the condo building to the LRT station nearby. However,
he said the developer had only provided a poor quality walkway without any
cover.
If a promise is conveyed through an advertisement, is there a basis for
claims? Whilst complaining in the press helps create awareness, a developer
is more likely to take the matter seriously if legal action is taken by the
house buyer or a group of house buyers collectively.
However, this involves all kinds of expenditure, and the benefits to be
gained may not commensurate with the efforts undertaken.
An advertisement alone cannot provide the basis for taking legal action for
a breach. To seek remedy or relief, a person’s rights must have been
infringed upon. When a property is purchased, all rights are enshrined in
the Sale and Purchase Agreement that is entered into. An advertisement that
has led to the transaction does not by itself create any rights.
An advertisement merely attracts attention to the existence of a possible
bargain. It is usually not the basis of a contractual arrangement. A binding
obligation is only created when an offer is made and that offer is accepted
unconditionally.
In order to hold a person to what is said in an advertisement, it must
amount in law to an offer. In most cases, an advertisement does not amount
to an offer in law that could be accepted so as to create binding relations.
The status of such an advertisement has been described by Bowen LJ in an old
English case in the following words.
“It is not like cases in which you offer to negotiate, or you issue
advertisements that you have got a stock of books to sell, or houses to let,
in which case there is no offer to be bound by any contract. Such
advertisements are offers to negotiate – offers to receive offers – offers
to chaffer.”
This is not to say that publishing an advertisement cannot ever create
binding obligations at all. If the terms on which the offer is made are
clear and stated in the advertisement and capable of being accepted, then a
binding obligation can be created based on the advertisement alone.
This is so even if the advertisement is published and the offer made to the
world at large. This is what happened in the well-known case of Carlill vs
Carbolic Smoke Ball Co. The defendants were the proprietors of a medical
preparation called The Carbolic Smoke Ball.
They issued an advertisement in which they offered to pay £100 to any person
who succumbed to influenza after having used one of their smoke balls in a
specified manner and for a specified period. They added that they had
deposited a sum of £1,000 with their bankers “to show their sincerity”. The
plaintiff bought and used the ball as prescribed, but came down with
influenza. She sued for the £100 which was offered.
The advertisers, in trying to get out of their obligation to pay the reward,
argued among others that the advertisement was a mere puff. It was not
intended to be taken seriously and it was not addressed to a particular
person. This argument did not find favour with the Court of Appeal which
went on to say:
“It was also said that the contract is made with all the world – that is,
with everybody, and that you cannot contract with everybody. It is not a
contract made with all the world. There is the fallacy of the argument. It
is an offer made to all the world; and why should not an offer be made to
all the world which is to ripen into a contract with anybody who comes
forward and performs the condition? Although the offer is made to the world,
the contract is made with that limited portion of the public who come
forward and perform the condition on the faith of the advertisement”.
Of course this is not to say that a person can publish deceptive
advertisements and get away with impunity. Advertisements, which are
deceptive, false or misleading, can be the subject of complaints leading to
censure and in some cases prosecution.
In the context of the print media, the Malaysian Code of Advertising
Practice seeks to ensure that all advertisements are legal, decent, honest
and truthful. Complaints can be made to the Advertising Standards Authority
of Malaysia. If an advertisement contravenes the code, the authorities can
stop the continuation of the advertisement.
With regard to advertisements that appear online, guidelines and regulations
are provided for in The Malaysian Communications & Multimedia Content Code.
Part 3 of the code deals with advertisements and sets out the principles and
specific guidelines.
Anyone who is aggrieved may lodge a complaint with the Complaints Bureau
under the code. Where the Complaints Bureau finds that the advertisement
breaches the code, the bureau can either issue a written reprimand or impose
a fine of up RM50,000 or require removal of the offending content.
Apart from the code, there are numerous restrictions against false and
misleading advertisements in the laws relating to companies, housing,
medical treatment and trade description whose provisions require an
advertisement to comply with certain conditions. Failure to do so can result
in the prosecution of the person who caused the advertisement to be
published and in many cases, the publisher himself.
Therefore, where an advertisement is required to be licensed and to comply
with certain requirements, and is published not in accordance with such
requirements, it would constitute an infringement of the code or Act.
However, this does not give an aggrieved person a basis to claim for damages
or for that matter any form of specific performance against the party that
has published such an advertisement.
Coming back to our reader, it is a little late to complain about the
advertisement. The material time to object to an advertisement is when it
has just appeared or is about to appear. Action taken at this point brings
about greater benefits.
Our reader’s grievance would be better addressed by relying on the Sale and
Purchase Agreement he has entered into with the developer to help him get
what he wants. |
