Comparing Australian Contract Law vs British Contract Law - Assignment Example

Choose from one of the following areas of Australian law examined in the the Australian legal system, tort law, contract law, consumer protection law, or employment law. Compare and contrast this area of Australian law with the same or similar area of law from one other country of your choice. Australian Contract Law v British Contract Law. 1. Introduction 1.1 Background The development of transactions worldwide led to the introduction of rules that would govern these processes. Contract law focuses on the protection of the rights of parties of transactions. It is necessary that these transactions have a specific format – which justifies the use of the specific type of law. Contract law has been differentiated in countries worldwide in accordance with the local system of law. Many differentiations exist in regard to the contract law of the Common Law countries – compared to the Civil Law ones. In current paper the relationship between the Australian contract law and the British contract law is explored. Through the research developed on this subject it has been proved that the forms of Contract law in the two countries are similar. However, their differentiations are also important. Reference is made especially to the absence of the principle of good faith in British law. The limitation of the protection provided by the British law to the parties of international contracts is another characteristic of the specific law. In the recent case law it is proved that efforts are made in order for the above issues to be addressed. Moreover, effort is made so that the differences with the other countries of the Common Law system, such as Australia, to be eliminated. On the other hand, because of the limitation of the space availability, current paper will not refer to all the aspects of British and Australian contract law. It will just focus on their common and their different characteristics – taking into consideration the fact that are based on the same legal framework. 1.2 Thesis Statement Australian law reflects the principles and the ethics of the Common law. From this point of view, the rules of Australian contract law are similar with those of British contract law. However, differentiations have been identified between the above two systems of law; this trend is clearer in the case law of both countries. It is assumed that the different social and economic frameworks of these countries resulted to the alteration of their judicial criteria. In any case, there is no full independency from the rules of the Common Law. 2. Australian Contract Law – overview, main aspects One of the key characteristics of Australian contract law is the fact that it is more permissive compared to the British contract law. This fact is reflected in the case Baltic Shipping v Dillon (1993) which introduces the principle that compensation can be given ‘for loss of reasonable expectations’ (Chen-Wishart, 2007, p.535). In other words, it is not necessary that the breach of specific terms of a contract has taken place. By proving the loss of reasonable expectations one of the parties can ask for compensation even if the breach of the contract is not clearly proved. Another important element of the Australian law is the high importance given to the good faith as a term for developing contractual agreements. Indeed, in accordance with Whincup (2006, p.148) in Australian law – as also in US law – there is an increased power of the good faith as part of contracts. More specifically, it is noted that recent case law in Australia proves the ‘growing acceptance of the good faith principle’ (Whincup, 2006, p.148). Reference is made to the following cases: ‘Alcatel v Scarcells, 1998 and GSA Group v Siebe, 1993’ (Whincup, 2006, p.148). On the other hand, the level at which good faith could influence the development of a contract is pre-defined. This means that there can be no excess use of the principle of good faith – in accordance with the Australian law – where issues of the contract that are irrelevant with the specific principle are to be judged (Latimer et al., 2008, p.407). On the other hand, the Australian contract law accepts that the applicability of the principle of good faith is high when one of the parties has a disadvantage. Reference is made to physical disadvantage either because of age or because of mental status (Latimer et al., 2008, p.407). At the next level, the position of Australian contract law in regard to the pre-contractual liability has to be clearly explained. In any case the term ‘pre-contractual liability’ is related to different consequences in Australian law compared to the British law. In accordance with Von Bar et al. (2004) the rules of tort law have been used by judges in Australia in order to establish the liability of a contractual party for the damages caused in the context of a contract. The fact that the process for the completion of the latter has not finished is not important. In this way, pre-contractual liability is established but under the terms that certain conditions apply. The case law referring to the fulfillment of the requirements of tort law can be used at this point. If the terms of tort law are met, then it is expected that ‘pre-contractual liability exists enabling reliance based damages to be claimed’ (Von Bar et al., 2004, p.228); indicative examples of such trend are the following cases: Walton Stores v Maher (1988). It should be noted that the acceptance of the Convention on Contracts for the International Sale of Goods (CISG)’ by the Australian law did not have the effects expected on the local legal rules. Indeed the increased intervention of CISG in disputes brought before the Australian Courts could cause alterations in the existing Australian contract law (Bant et al., 2010, p.51). The above fact should be carefully considered by judges in Australia when having to rule on such cases. The performance of Australian contract law has been negatively affected by the fact that its rules are dispersed in many legislative texts. The above phenomenon does not appear in British law where the relevant legal framework is more integrated. Moreover, the fact that the Australian law has been aligned with the International law (referring to CISG) did not help towards the increase of integration of the Australian law. In practice, this failure has resulted mostly because of the lack of willingness of the local legislators and judges to fully reform the country’s contract law (Hiscock, 2010, p.162). Through such practice, the distance between the Australian law and the British contract law will be also decreased. 3. Discussion of British Contract Law British law is often preferred for the resolution of disputes related to international contract. In accordance with Schulze (2007, p.359) the English law is often set by the parties of international contract as the law through which any dispute related to their contract is evaluated and resolved. The above trend is explained by the fact that the British law is more appropriate for a series of transactions, including ‘commodity sales, charter parties and a variety of financial transactions’ (Schulze, 2007, p.359). On the other hand, the principle of the good faith does not have particular power in the context of the British law. At the specific point, English law is differentiated from the other legal frameworks based on the Common law, for instance the American and the Australian law. In fact, it is noted by Whincup (2006) that the good faith as part of the British contract law is a principle appeared because of the European law. In the context of the European law British legislators and judges are obliged to take consideration of the good faith when developing the rules regulating the contracts or judging a dispute in which such issue is involved. The introduction of good faith in the English contract law is related to the ‘Unfair Terms in Consumer Contracts Regulations 1999, EU’ (Whincup, 2006, p.148). The principle of good faith would be fully developed within the British law only under the terms that the country’s legal framework is aligned with ‘the Vienna Convention on Contracts for the International Sale of Goods’ (Whincup, 2006, p.148). In any case, the practice of the British law not to recognize the principle of the good faith as applicable in contracts is aligned with the Common law, which ‘has traditionally rejected a doctrine of good faith in the contract law’ (Pace International Law Review, 2007, p.169). Another characteristic of the British contract law is the fact that it does not result to the equal protection of the parties. In this context, it is possible that the rights of parties in international contracts are protected at lower level compared to the parties of domestic contracts (Schulze, 2007, p.359). In regard to the pre-contractual liability, the British contract law uses a common approach with the Australian law. More specifically, in English law there is no specific part of the law dealing with the pre-contractual liability. However, the principle of estoppel is likely to be used in order for the English Courts to accept the existence of pre-contractual liability. The use of the principle of estoppel in this case, could be described as follows: ‘a party is prevented from pleading having accepted that the contract does not exist’ (Von Bar et al., 2004, p.228). In any case, the above approach could not lead actually to the establishment of pre-contractual liability but to liability for compensation because of expectations, i.e. to expectation based liability (Von Bar et al., 2004, p.228). At this point, the differentiation of both the Australian and the British contract law with the common law is made clear; in the context of the common law the existence of the pre-contractual liability could be accepted using the following justification: ‘the work carried out as part of a contractual agreement need to be compensated’ (Von Bar et al., 2004, p.228). Through this argument, the expenses made in the preparation phase of a contract should be also paid – even if the contract was not completed. On the other hand, Monahan (2001) notes that common law accepts the existence of a contract only when there is a clear intention of the parties to form a contract (Monahan, 2001, p.19). From this point of view, the refusal of the Australian and the British courts to accept the pre-contractual liability may be justified. If the intentions of the parties lead to the assumption that there was no willingness for developing a contract, then the parties cannot ask for compensation for a non-completed contract. Of course, they could use the principles of tort law in order to be compensated for the damages suffered. 4.Conclusion Australian Contract Law has been differentiated – in regard to specific issues – from British Contract Law. However, it has been also proved that efforts are made so that these differences are eliminated – as possible. On the other hand, this is a trend developed mostly in the case law and not in the legislation of these countries. In the context of the international contracts, the above two legal frameworks follow similar practices, a fact revealed ‘through their acceptance of the Convention on Contracts for the International Sale of Goods (CISG)’ (Bant et al., 2010, p.50). In any case, both the Australian Contract Law and the British Contract law are based on the Common Law. For this reason, they are expected to develop similar solutions on disputes referring to contracts of various forms. But even if different approaches are used in the interpretation of common law rules in regard to contracts, still the Australian and the British legal frameworks have similar characteristics – as parts of an integrated legal system. References Bant, E. & Harding, M. (2010). Exploring Private Law. Cambridge University Press Chen-Wishart, M. (2007). Contract Law. Oxford University Press Gillies, P. (1988). Concise contract law. Federation Press Hiscock, M. (2010).The Internationalisation of Law: Legislating, Decision-Making, Practice and Education. Edward Elgar Publishing Latimer, P. (2008). Australian business law. CCH Australia Limited Monahan, G. (2001).Essential contract law. Routledge Pace International Law Review (2007). Review of the Convention on Contracts for the International Sale of Goods (CISG): 2005-2006. Sellier. European law Publishers Schulze, R. (2007). New features in contract law. Sellier. European Law Publishers Von Bar, C., Drobnig, U., Alpa, G. (2004). The interaction of contract law and tort and property law in Europe: a comparative study. Sellier. European Law Publishers Whincup, M. (2006). Contract law and practice: the English system with Scottish, Commonwealth, and Continental comparisons. Kluwer Law International Links of sources http://books.google.gr/books?id=cGEr422SMfAC&pg=PA51&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=5&ved=0CD4Q6AEwBA#v=onepage&q=Australian%20Contract%20Law&f=false Bant, E. & Harding, M. (2010). Exploring Private Law. Cambridge University Press http://books.google.gr/books?id=CHYo04GovjcC&pg=PA464&dq=Britain+and+contract+law&hl=el&ei=_J_lTPb7E4y14Aa3jenwDg&sa=X&oi=book_result&ct=result&resnum=4&ved=0CDUQ6AEwAzgK#v=onepage&q=Britain%20and%20contract%20law&f=false Chen-Wishart, M. (2007). Contract Law. Oxford University Press http://books.google.gr/books?id=H0MdPMgEMbAC&pg=PA6&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=10&ved=0CFkQ6AEwCQ#v=onepage&q=Australian%20Contract%20Law&f=false Gillies, P. (1988). Concise contract law. Federation Press http://books.google.gr/books?id=Obt9gCkdoRoC&pg=PA162&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=6&ved=0CEQQ6AEwBQ#v=onepage&q=Australian%20Contract%20Law&f=false Hiscock, M. (2010).The Internationalisation of Law: Legislating, Decision-Making, Practice and Education. Edward Elgar Publishing http://books.google.gr/books?id=gQTYUWzzCYoC&pg=PA407&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=8&ved=0CE4Q6AEwBw#v=onepage&q=Australian%20Contract%20Law&f=false Latimer, P. (2008). Australian business law. CCH Australia Limited http://books.google.gr/books?id=kgtokddupegC&printsec=frontcover&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCkQ6AEwAA#v=onepage&q=Australian%20Contract%20Law&f=false Monahan, G. (2001).Essential contract law. Routledge http://books.google.gr/books?id=bojqMOwdmx4C&pg=PA169&dq=Australian+Contract+Law&hl=el&ei=EJ7lTK3TIsf74AbC76jwDg&sa=X&oi=book_result&ct=result&resnum=9&ved=0CFQQ6AEwCA#v=onepage&q=Australian%20Contract%20Law&f=false Pace International Law Review (2007). Review of the Convention on Contracts for the International Sale of Goods (CISG): 2005-2006. Sellier. European law Publishers http://books.google.gr/books?id=7G4pUgTY1EgC&pg=PA359&dq=Britain+and+contract+law&hl=el&ei=tp_lTM3QG4f84AbGl7HwDg&sa=X&oi=book_result&ct=result&resnum=8&ved=0CE4Q6AEwBw#v=onepage&q=Britain%20and%20contract%20law&f=false Schulze, R. (2007). New features in contract law. Sellier. European Law Publishers http://books.google.gr/books?id=1QEjSxsmDJQC&pg=PA228&dq=Australian+Contract+Law&hl=el&ei=fp_lTLbOCYSU4gau2JjwDg&sa=X&oi=book_result&ct=result&resnum=2&ved=0CCsQ6AEwATgU#v=onepage&q=Australian%20Contract%20Law&f=false Von Bar, C., Drobnig, U., Alpa, G. (2004). The interaction of contract law and tort and property law in Europe: a comparative study. Sellier. European Law Publishers http://books.google.gr/books?id=3N2fiMcawKUC&pg=PR19&dq=Britain+and+contract+law&hl=el&ei=_J_lTPb7E4y14Aa3jenwDg&sa=X&oi=book_result&ct=result&resnum=2&ved=0CCsQ6AEwATgK#v=onepage&q=Britain%20and%20contract%20law&f=false Whincup, M. (2006). Contract law and practice: the English system with Scottish, Commonwealth, and Continental comparisons. Kluwer Law International Read More