The Government’s Proposed 'Review of Australian Contract Law': A Preliminary Positive Response

Abstract

This paper responds to eight sets of questions posed in a thought-provoking “Discussion Paper to Explore the Scope for Reforming Australian Contract Law” (DP). The DP was released on 22 March 2012 by the Attorney-General’s Department (AGD), as part of its project aimed at “Improving Australia’s Law and Justice Framework”, and it is likely to generate considerable controversy among those more comfortable with existing domestic law. This paper mainly: (a) highlights additional problem areas and hence “drivers for reform” (including consumers and some parts of the legal profession); (b) the direct and opportunity costs incurred by complex domestic contract law, and their disproportionate impact on certain groups; (c) the growing disparities with the contract law regimes found in Australia’s major trading partners nowadays (especially now that some are engaging in comprehensive contract law reforms of their own) or at the international level; (d) how best to conceptualise and address challenges involved even in a “Restatement” approach to reforming Australian contract law.

One tentative conclusion is that reform initiatives may indeed promise fewer directly-measurable benefits than in the EU (with significant divergences in contract law rules and broader legal culture across member states) and even the USA (because its highest court does not bind state courts on contract law issues). Yet contract law initiatives in Australia can also be carried out at lower cost, learning from the harmonisation processes as well as the results or legal norms generated by comprehensive national and international reform projects, particularly over the last decade. Another conclusion is that possible reform of Australian contract law highlights major distributional questions, not just issues of aggregate economic efficiency.

An Appendix lists Submissions (including this paper) in response to the DP, listed on the AGD's website.

A longer version of this paper, updated especially in light of other public Submissions to the government’s Review, is published in Mary Keyes and Therese Wilson, eds, Codifying Contract Law (Ashgate, 2014).

Keywords: contract law, law reform, comparative law, Asian law, commonwealth Law, private international law, consumer law, arbitration law

JEL Classification: K10, K12, K13, K30, K33