Can a broker’s marketing material overpromise about a business for sale?

A listing package is promotional material, and the federal Competition Act is not limited to products. The Act speaks of representations made to promote any business interest, so a claim in a broker’s listing may fall within it; whether a particular one does is a question for a lawyer. That does not make every optimistic phrase unlawful, and it does not replace your own checking.

What the Act says

Section 52 prohibits knowingly or recklessly making a representation to the public that is false or misleading in a material respect, for the purpose of promoting any business interest. Section 74.01, in Part VII.1 on deceptive marketing practices, treats making such a representation to the public as reviewable conduct, without the knowledge or recklessness wording. The Competition Bureau describes it as against the law to advertise or market in a way that is false or misleading.

General impression counts

Both sections direct that the general impression conveyed by a representation be taken into account along with its literal meaning. For a buyer reading a package, that is a reason to read a headline figure together with its notes and definitions. Whether a particular document was made to the public, or was material enough to engage the Act, is a legal question for a lawyer, not something this page can settle.

What a buyer can do about it

BDC says due diligence is where you check that the numbers match the reality on the ground, so treat marketing figures as claims to test. If you believe a representation was false or misleading, the Competition Bureau’s page explains how to report suspected deceptive marketing. Section 36 of the Act also lets a person who suffered loss or damage from conduct contrary to Part VI, which includes section 52, sue for it, within the time limit that section sets.

For how listings are put together in the first place, see how brokers market a business for sale.