It is an offence under both Commonwealth and State legislation to induce another party to enter into a contract by using false or misleading representations. Generally traders are not allowed to make false claims about anything that could be used to persuade a person to enter into a contract for goods or services.
It is an offence under the Australian Consumer Law to make false or misleading representations about goods or services [Competition and Consumer Act 2010 (Cth) Schedule 2, s29]. Examples include misrepresentations as to:
Maximum penalty (see s 151 Competition and Consumer Act 2010 (Cth) Schedule 2):
It is also an offence to make false or misleading representations about the sale of land (s.30).
An example of a misleading representation is marketing a cordial claiming it contains fruit extracts when it does not (see ACCC v Cadbury Schweppes Pty Ltd  FCA 516).
Where a claim or representation has been made to promote the supply of goods or services a supplier can be served with a notice (a substantiation notice) by the Australian Competition and Consumer Commission (ACCC) requiring them to:
[Competition and Consumer Act 2010 (Cth) Schedule 2 s 219]
The Misrepresentation Act 1972 (SA) makes it an offence to induce another party into entering a contract by misrepresentation and provides for criminal sanctions to be imposed [s.4].
If a business makes a false representation inducing a consumer to enter a contract, to pay money, to transfer land or personal property then the trader and/or the agent or employee making the representation are both guilty of a criminal offence.
What is a misrepresentation?
A misrepresentation is a false statement or intentional misstatement used to induce a person to enter into a contract.
Civil actions and exclusions
In addition, the Misrepresentation Act 1972 (SA) allows a number of civil actions for a consumer to take (see: Contracts) even in the case of a private sale. It also provides that contracts which say they exclude or restrict liability for any misrepresentation made before the contract shall be of no effect unless a court decides that it is fair and reasonable in all the circumstances of the case [s 8].