Pre-Transaction Conduct and Liability for Misleading and Deceptive Conduct

Two recent decisions reinforce that liability for misleading and deceptive conduct under the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) can arise well before binding transaction documents are signed by the parties.

The cases are United Petroleum Pty Ltd v Perth Airport Pty Ltd (No 2) [2026] FCA 620 (Federal Court of Australia, 20 May 2026) and Shakespeare Partners Pty Ltd v Transonic Travel Pty Ltd [2026] VSCA 96 (Victorian Court of Appeal, 15 May 2026).

If your business issues tender documents, information memoranda or due diligence materials, or if you advise on transactions where someone else does, this article is relevant to you.

Five practical lessons for dealmakers

1. Marketing materials are representations. Promotional materials designed to attract bidders, investors or purchasers may contain representations which result in claims against those who made them (or were knowingly involved in making them). Statements made in brochures, presentations and information memoranda should therefore be reviewed carefully for accuracy and appropriate qualification before those documents are circulated.

2. Future projections need reasonable grounds. Representations about future events, outcomes or performance should be supported by objectively reasonable grounds at the time they are made. The greater the uncertainty, the more important it is to clearly communicate that uncertainty.

3. Advisers can also be exposed. Liability is not confined to the person making the representation. Advisers who knowingly assist, approve or facilitate the communication of misleading information may themselves face liability.

4. Disclaimers have limits. Disclaimers remain important, but they are unlikely to protect a party that makes, or knowingly facilitates, misleading representations. Courts will assess the overall impression created by the communications.

5. Emails can become critical evidence. Internal and external communications can later be used to establish what individuals knew at the time, and whether representations were made with appropriate foundations.

The legal principles

The cases involved three well-established ACL principles:

• misleading or deceptive conduct is prohibited (section 18);
• representations about future events must be supported by reasonable grounds when made (section 4); and
• advisers and other third parties can be liable where they knowingly assist or facilitate misleading conduct (section 2).

Both decisions demonstrate the courts’ willingness to apply these principles in a transaction context.

The Perth Airport case: promotional materials containing unqualified statements can result in liability

Perth Airport Pty Ltd issued an Information Brochure as part of a tender process for commercial opportunities within a new airport precinct. The brochure presented the proposed relocation of Qantas operations and the associated increase in passenger traffic as a key part of the commercial opportunity. United Petroleum relied on those representations when entering into a long term lease and developing a substantial service station facility.

The Federal Court found that the relocation project was materially more uncertain than the Information Brochure suggested. It used “when Qantas relocates”, not “if”, and built its commercial case around the projected traffic growth that would follow. Importantly, these were representations as to future matters. Under the ACL, such representations are taken to be misleading unless the maker can demonstrate it had reasonable grounds for making them when made. Perth Airport was unable to satisfy that burden. Although it sought to rely on disclaimers contained elsewhere in the tender documentation, the Court concluded that the overall impression created by the promotional materials was misleading.

The decision serves as a reminder that businesses should ensure marketing and tender materials accurately reflect what is known, and appropriately communicate material risks or uncertainties. Future-facing statements should not be treated as aspirational marketing; they should be supported by contemporaneous, objectively reasonable grounds and carefully qualified where uncertainty exists. A disclaimer in another document may not be enough if the primary communication creates a misleading impression.

The Shakespeare Partners case: advisers are not immune

The second case arose from the sale of a majority interest in a travel business. During the transaction, the purchaser received information concerning the target company’s client funds and financial position. Certain aspects of that information were later found to be inaccurate.

Shakespeare Partners, the target’s long-standing accountants, had assisted in preparing and providing due diligence materials, and approved responses that conveyed the inaccurate position. The relevant conduct consisted of placing materials in a data room without qualification and remaining silent when incorrect information was conveyed to the purchaser.

That combination of knowledge and conduct was sufficient to establish involvement. The court found that the relevant director knew key information being provided to the purchaser was false and nevertheless participated in the process.

Shakespeare relied on compilation disclaimers and engagement terms which stated that it was not required to verify underlying information. The Court gave those arguments no weight. Section 18 is a statutory prohibition and cannot be excluded by contract. However, disclaimers may be relevant to reliance, depending on how and where they are deployed. Engagement letter protections may operate in contract or negligence, but they do not displace ACL liability.

As a result, Shakespeare was found to have been involved in the misleading conduct and was liable as an accessory. The case highlights that professional advisers cannot assume that engagement terms or compilation-style disclaimers will shield them where they knowingly facilitate the communication of false information.

What this means for businesses and advisers

The common theme across both decisions is the risk created when parties with superior information communicate with prospective counterparties without properly disclosing known limitations, uncertainties or inaccuracies.

Businesses should take particular care when preparing:

• information memoranda;
• marketing and tender materials;
• due diligence responses;
• management presentations; and
• transaction-related correspondence.

Before information is provided, consider whether:

• the statements accurately reflect what is currently known;
• any assumptions or uncertainties should be disclosed;
• future projections are supported by reasonable grounds;
• responsibility for preparing and reviewing key information has been allocated to the appropriate members of management and external advisers; and
• any known inaccuracies or uncertainties have been addressed.

The bottom line

The key lesson from both decisions is that parties with superior information cannot safely rely on assumptions, silence or boilerplate disclaimers when communicating with prospective counterparties. Whether preparing marketing materials, responding to due diligence requests or advising on a transaction, representations should be accurate, appropriately qualified and supported by reasonable grounds.

If information is known to be inaccurate, it should be corrected. If future outcomes are uncertain, that uncertainty should be clearly disclosed. Taking those steps early can significantly reduce the risk of ACL liability later.

How Sierra Legal can help

Sierra Legal is a corporate and commercial law firm specialising in mergers and acquisitions, technology law, privacy and data security, and commercial contracts. If you are preparing transaction materials, running a sale process or responding to due diligence, we can help you review your materials for ACL risk and put appropriate qualifications in place before they are circulated.

Contact us at sierralegal.com.au to discuss how we can help.