Seller Beware: Supreme Court Changes Test For Assessing Whether Advertising Is Misleading

In February 2012, in Richard v. Time Inc., 2012 SCC 8 the Supreme Court of Canada (the Court) held that a determination that an ad is misleading is based on the general impression a consumer has after initial contact with the entire ad, and relates to the ad's layout and words used. The "general impression" does not result from a minute dissection of an ad's text. According to the Court, courts cannot approach an ad as if it was a commercial contract.

Moreover, the Court held that an ad's "general impression" must be determined from the perspective of the "credulous and inexperienced" consumer. In doing so, the Court found the lower court erred in defining the consumer as one with an average level of intelligence, scepticism, and curiosity. According to the Court, the "credulous and inexperienced" consumer has no experience in detecting falsehoods or subtleties in commercial representations and is prepared to trust vendors based on ads' general impressions. He/she is