©The
Star (Used by permission)
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.
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Bhag Singh: Misleading ads
14 Oct 2008 12:00 am