The Federation Press

Models of Contract Law

an empirical evaluation of their utility

Overview

Published in association with the Law and Justice Foundation of NSW

The Case Law in common law jurisdictions is massive and burgeoning. This is particularly true of private law, including contract law. To date there are over 6,000 Australian cases on contracts, over 900 of them in the High Court of Australia. There is wide agreement that it is becoming increasingly costly to locate, comprehend and apply.

Would it be beneficial if it were replaced by an authoritative statement of the law in a more accessible form, such as in a code? If there were to be a code, should it state the law in a relatively small number of broad principles or state it in the form of numerous detailed rules?

The authors of Models of Contract Law conducted three experiments which compared the utility of Case Law with that of two different codes of contract law:

- UNIDROIT Principles of International Commercial Contracts, a detailed model code published by the International Institute for the Unification of Private Law.
- The Australian Contract Code, a short draft code published by the Victorian Law Reform Commission in 1992.

Their book reports the hard data of this empirical research and their conclusions based on it. These are: there is a good case for codification, d it would be better if the code stated broad principles rather than detailed rules.

Reviews

This is an important book. If I had not served for a decade in the Australian Law Reform Commission ... I would doubtless have cast it aside as propounding ideas undesirable, futile or both. But I would have been seriously wrong to do so. ...
[The authors] have convinced me that the availability of a statement of Australian contract law in a national code, using one of the available models they describe, is a course to be followed. Now they have the task before them to convince the sceptical, the apathetic and the resistant. Just as Robert Torrens had to do 150 years ago. It can be done. There are new allies. There is a partial model in the particular field on insurance contracts. In the end, contract law is an integral part of the economy. The economy eventually shakes off serious inefficiency. The current law is inefficient. Concepts not cases should prevail. - Justice Michael Kirby, High Court of Australia

This book is valuable because of the project’s innovative experimental design ... But I remain unconvinced that the experiments sustain the weighty conclusions drawn. Chiefly would decisions (particularly lower in the judicial hierarchy where most contract cases are determined) be more predictable or fair if only general principles including a general unconscionability bar were applied? - Philip Barton, Law Institute Victoria Journal

Table of Contents

Foreword
Preface
Acknowledgments

Significance of the research

Aims of the project
Significance of contract law
Potential benefits of codifying contract law
Empirical nature of research

The three law models

Case law
UPICC
ACC
Illustration: ‘Base Metals v Precious Metals’

Methodology

Utility
Research design

Results of the experiments

Experiments 1 and 2
Experiment 3

Conclusions

Analysis model
Conclusions on codification
Conclusions on choice of code-type
Conclusioons on broad principles and detailed rules

Appendix 1 - Materials for Experiments 1 and 2
Appendix 2 - Materials for Experiment 3
Appendix 3 - Summary of law model, fairness and difficulty effects on lay reader evaluations of judgments
Reference list

Of interest...