Possible reforms to contract law in Australia

1 June 2012

In March 2012, the Commonwealth Attorney-General released a discussion paper seeking views on possible reforms to contract law in Australia.

The reform aims to cut red tape for business and to help businesses prosper in an increasingly globalised and digital economy.

Federal Attorney-General Nicola Roxon said that, although the World Bank currently ranks Australia 17^th out of 183 countries for ease of enforcing contracts, there may be some further enhancements that can be made.

The Commonwealth Attorney-General’s Department is seeking comments on the problems that businesses and individuals may experience when contracting and whether reforms could address these issues.

“Although only in its early stages, implementing reforms to Australian contract law could result in major changes in the law,” Assistant Crown Solicitor Melinda Pugh said.

“It is possible that changes to the law will shift what is now principally an area of judge-made law, that develops case-by-case into a statutory regime.”

The paper considers whether Australian contract law could be reformed to:

• increase the accessibility of contract law
• improve the certainty of the law in those areas that are unclear or unsettled
• simplify the law and remove unnecessary technical rules
• set basic standards of acceptable conduct
• support innovation and new ways of doing business
• maximise participation in the digital economy
• ensure that contract law meets the needs of small and medium-sized businesses
• facilitate elasticity and flexibility to help support long-term contractual relationships
• harmonise statute law applying in the different States and Territories, and internationalise the law to facilitate cross-border trade and investment.

There is a wide spectrum of possible options for contract law reform, including:

• restatement – expressing the existing law in a single text to increase its accessibility, while making only minimal changes to the substance of the law
• simplification – changing the law to eliminate unnecessary complexity without attempting a general overhaul
• full-scale reform – making significant changes to the substance of contract law.

The paper is structured to provide readers with a brief description of contract law and discussion points. Submissions are welcome to address any or all of the questions that appear throughout the paper, or any other matters relevant to contract law.

There will be a three-month consultation period with submissions due by close of business on 20 July 2012.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}