In brief - Contract law should reflect today's technology,
be simplified and be harmonised across jurisdictions
Australia currently does not have harmonisation of contract law
between the Commonwealth, the states and territories. When
transactions take place on the internet, it can be unclear which
jurisdiction is operating.
It's not exactly a new idea; reform of contract law has been
proposed for more than a century, so it's not necessarily going
to be an easy change.
So are we too set in our ways or is reform to contract law
Why do we need to reform contract law?
Let's start with a few reasons why reform might be
necessary. First, between the Commonwealth, the states and
territories, we have approximately 150 statutes for contract law,
not to mention common law. It begs the question as to why this
would really be necessary, not to mention the complication that may
occur in cross-border transactions.
The complex relationship between common law, equity and statute
is making it difficult to predict outcomes. We do not currently
have harmonisation when it comes to contract law. This means
additional costs for consumers and far less predictability. At the
very least the government should consider a simplification and
harmonisation of some of our existing contract laws.
Contract law needs to adapt to technological change
Another element to consider is that perhaps some of these laws
are becoming a little outdated. Some of the common law rules that
are still good law today are centuries old.
No doubt we will have the advocates of the old line, 'if it
ain't broke, don't fix it', but when we consider the
advances in economic, social and, in particular, technological
aspects of our society, shouldn't our contract laws that are
used and applied day in, day out accommodate us?
The other side of the argument is that over the last three
years, less than 5% of the number of cases heard before the High
Court involved contract law, which doesn't necessarily create a
strong argument for the need for contract law reform in this
As the discussion paper points out, technology has transformed
consumer behaviour considerably, especially when we acknowledge how
many transactions are taking place on the internet. In such
instances it can be unclear which jurisdiction is operating.
Harmonisation of laws in this area would surely help to eliminate
ambiguity and complexity in such instances.
There's an argument that our current laws aren't up to
date with the technology of today and that reform of contract law
could support Australian businesses better to utilise the wonder
that technology really is today.
The discussion paper addresses this issue, stating the possible
need for contract law to adapt to new technologies and commercial
dealings, including electronic drafting.
Contract law reform will reflect greater use of technology
Reform to contract law is in the pipeline. At the very least, we
should expect to see reforms addressing greater use of technology,
with more online transactions and electronic drafting occurring and
electronic formats being the primary method of communication.
It is to be hoped that the government will seize this
opportunity to implement an overall simplification and
harmonisation of contract law.