Symposium paper: the UNIDROIT Principles: an Australian perspective.

AuthorFinn, Paul
PositionSymposium Paper

I intend to view the UNIDROIT Principles of International Commercial Contracts ('Principles') (1) through the prism of Australian law and to suggest ways in which it may enrich Australia's domestic contract law. That law, unhelpfully, has six potential sources--the common law, equity. Commonwealth statute, State or Territory statute, international instruments, e.g. the Vienna Convention on the International Sale of Goods, and finally the terms of contracts themselves. With much of contract law being simply default rules, the terms of a contract are, of the utmost importance. But having such diverse sources for our law is a recipe both for incoherence and for inertia in legal development.

When I brought out Essays on Contract (2) twenty years ago, a United States reviewer described Australian contract law as it emerged from The pages of that volume: '[It] is interesting for its own sake. It appears to be a living museum of an earlier and simpler age of the common law'. (3)

I will let you ponder the justice of this. I will also let you ponder how our contract law would look and work were it not for the provisions of the Trade Practices Ad 1974 (Cth). What I wish to raise first is the subject of renovation of contract law. My obvious premise here is that Australian contract law is a little tired, a little inadequate to the world in which it now finds itself. It needs regeneration.

I would suggest, for example, that areas such as estoppel--the whole area of suspension and renunciation of rights dealt with variously by waiver, estoppel, variation and election (4)--contract interpretation and the implication of terms could do with some attention, as could long term contracts, at least in relation to such matters as termination for just cause (e.g. because of a breakdown of trust and confidence between the parties). This suggestion exposes a real difficulty for us.

While it is by no means a self-evident proposition--that there should be one common law of Australia--such is clearly the law and has recently been reaffirmed by the High Court in Farab Constructions Pty v Say-Dee Pty Ltd. (5) An odd consequence of This insistence is to destroy what has been the refuge of traditional thinkers of our contract law. This is that Parliament can change the common law, if it does not agree with judicial decision on it. The concomitant proposition is that ordinarily it is for Parliament and not the courts, save in simple or clear cases, to vary or modify a settled rule, or principle, of the common law if it is ill suited to modern circumstances. All one now can say is, with our one common law, it would require either heroic acts of cooperative federalism or the Commonwealth's use of its legislative powers over corporations, and trade and commerce (so far as they go) to effect significant changes to contract law across the nation.

The High Court has now cemented its position as the custodian of the vitality of our common law including, for...

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