Contract Codification: Cautionary Lessons from Australia
| Published date | 01 May 2019 |
| Author | |
| Pages | 204-229 |
| DOI | 10.3366/elr.2019.0549 |
| Date | 01 May 2019 |
In March 2012, the Australian Commonwealth Attorney-General's Department published an ambitious Discussion Paper which explored the prospect of codifying or otherwise reforming the law of contract.
Despite the boldness of the 2012 Discussion Paper, there is little reason to think that the codification of the Australian law of contract is likely to be embarked upon in the foreseeable future.
This article cannot, and does not, seek to examine the full range of matters which arise when asking whether the law of contract ought to be codified. To do so would require grappling with a vast range of questions, including whether codification is an effective mechanism for substantive reform of the law of contract, whether the domestic law of contract ought to be ‘harmonized’ with international instruments or with other legal systems,
A comprehensive examination of these issues must await another day.
The article proceeds in three parts. It first gives an overview of the history of contract codification in Australia. Against this backdrop, it then proceeds to identify and examine two challenges inherent in contract codification which have been given too little attention by the proponents of reform in Australia.
The first species of difficulty arises from the conceptual and cultural dimensions of codification. As will be seen, building support for a contract code is made especially challenging by the continued lack of agreement as to contract law's proper purpose. Even in the wake of decades of academic debate as to the objects and nature of the law of contract, consensus remains elusive. After offering a very brief overview of the nature and extent of the continuing controversy, it will be shown that these unresolved theoretical questions have real ramifications for the way in which the codification process ought to be carried out, and the nature and content of any code. Indeed, as will be seen, the 2012 Discussion Paper issued by the Commonwealth Attorney-General's Department is a clear example of a reform proposal which fails to negotiate a clear path through competing conceptions of contract's purpose. If contract codification is to stand a real chance of being achieved in Australia, far more must be done on the part of its proponents to engage with the ongoing conceptual debates which continue to produce widespread division.
In addition to this conceptual challenge, the successful implementation of a contract code is often made difficult by the lack of enthusiasm typically evinced for codifying instruments on the part of practitioners and judges. As will be seen, much has been written in respect of common lawyers' tendency to view statute as an extraneous incursion upon the common law. Comparatively little, however, has been said about the degree to which codes are susceptible to being undermined by judicial and professional resistance. It is suggested that the proponents of codification ought to do far more to engage with stakeholders in the judiciary and the profession.
Having charted these conceptual and cultural matters, the article then moves on to an examination of the second type of difficulty, which is that encountered in seeking to identify a core body of rules and principles which together constitute ‘contract law’. Any contract code must grapple not only with contract's intersection with other bodies of law, but with the divisions and fault lines internal to the law of contract. As will be seen, proponents of codification in Australia have too often sought to treat the law of contract as a monolithic and internally homogenous legal structure. In consequence of this, codification proposals have tended to elide important distinctions within the law of contract, and to pay too little attention to the important question of how any contract code will interact with other spheres of law with which the law of contract overlaps. It will be suggested that until an appropriate degree of sophistication is brought to the challenges posed in this area, contract codification is unlikely to proceed successfully.
Though perhaps somewhat surprising in light of Australia's colonial history, codification proposals have played a relatively minor part in the development of Australian private law.
Before turning to a consideration of those proposals, however, something must be said by way of definition of the terms employed here, as ‘codification’ is an expression which admits of a range of understandings.
[A]n instrument enacted by the legislature which forms the principal source of law on a particular topic. It aims to codify all leading rules derived from both judge-made and statutory law in a particular field. And codification is the process of drafting and enacting such an instrument. A code by this definition is distinct from an ordinary statute because it is designed to be a comprehensive and coherent presentation of the law. Thus it has an organising and indexing role that an ordinary statute does not share.
To this it is necessary to add only two further points. The first is that, at least for the purposes of the present discussion, ‘codification’ should not be understood as being limited to an instrument that seeks simply to restate the common law in a statutory form. It encompasses also those reforms which seek to both restate and reform the law.
The second point to be made is that codes, in a common law system, are typically construed in a manner consonant with their intended character as the principal statements of the law on their subject. The seminal statement of the proper approach to the construction of a code can be found in the speech of Lord Herschell in
I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.
[Hearn] sought no less than the codification of the main body of the general law of Victoria in a Bill, ‘The General Code 1885’, which he presented to the [Legislative] Council in 1885, the result of his academic work, particularly on the classifications of law. Notwithstanding a favourable report from a Joint Committee of both Houses, the Victorian Parliament succumbed to opposition from the legal profession and, after Hearn's death, failed to enact ‘Australia's most interesting experiment in applied jurisprudence’.
That proposal was advanced by Fred Ellinghaus and Ted Wright, who together...
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