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2014 Vol28 No3 September-November 2014

‘Reasonable endeavours’ and ‘the objective approach’: Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7
Author: Julian Zmood

In the recent decision of Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7 (Verve v Woodside), the High Court was called upon to consider the meaning to be given to a ‘reasonable endeavours’ clause within a gas supply agreement (GSA) and to consider, more broadly, the preferred approach to be taken when determining the rights and liabilities of parties to a commercial contract.

Striking the modern balance between freedom of contract and consumer rights
Author: Steven Rares

The Latin expression caveat emptor is emblematic of the concept of freedom of contract. The exhortation, that the buyer should beware, symbolises both civilian and common lawyers’ appreciation of the benefits and dangers of freedom of contract. On April Fools’ Day 2010, the British online retailer, GameStation, added a new clause to its standard online terms and conditions. This was in the section of the site’s webpage that inevitably pops up with a box that needs to be ticked saying: ‘I agree to the standard terms and conditions’. That usually has a link to those provisions. It is common experience that these are not short virtual documents. 

The first new term was: ‘By placing an order via this Web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non transferable option to claim, for now and for ever more, your immortal soul. Should We wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from or one of its duly authorised minions.’

GameStation also added the following additional term: ‘We reserve the right to serve such notice in 6 (six) foot high letters of fire, however we can accept no liability for any loss or damage caused by such an act. If you a) do not believe you have an immortal soul, b) have already given it to another party, or c) do not wish to grant Us such a license, please click the link below to nullify this sub-clause and proceed with your transaction.’
All the shoppers were given a simple tick box option allowing them to opt out. Few of them did that even though, if they had, they would have received a ₤5 voucher. News reports suggested that GameStation had estimated that about 88% of people who contracted with it on that fateful day may have paid more than they realised that they bargained for. Luckily, GameStation cancelled those conditions and announced that it did not intend to enforce them after April Fools Day 2010.

While this was an April Fools’ Day joke, GameStation’s adventure had a serious side. It exposed what almost everyone does when confronted with standard terms and conditions in any situation. These can be contained not only in an online contract but also in a home mortgage, an insurance contract, an airline ticket, a bill of lading or the ticket one receives when taking a car into a parking station. Nothing has changed since the great British judge, Lord Reid, said in 1966:

‘In the ordinary way the customer has no time to read them, and if he did read them he would probably not understand them. And if he did understand and object to any of them, he would generally be told he could take it or leave it. And if he then went to another supplier the result would be the same.’1

In this paper, I propose to deal with a little bit of history about the development of consumer law in the international context before moving to some more recent developments, particularly in Australia, including online contracting.

Competition, fairness and the courts
Author: Steven Rares

Much of our commercial law is now statutory. It fundamentally affects the way in which the economy functions and that, in turn, affects our daily lives. The policy underlying statutory law is determined by the Parliament. Usually that policy has been considered by the Executive Government before being submitted to the Parliament for its consideration.

It is not the function of a serving judge to enter too far into the arena of policy in commenting on existing or possible laws. There are in our system of government well recognised, though not always observed, divisions of power between the Parliament, the Executive and the Judiciary.

Nonetheless, judges must have regard to the purpose of legislation in order to give it a coherent interpretation. In addition, the experience of the courts in administering the law contained in statutes can give a judge insight into areas in which reform or legislative attention are desirable.

This is the 40th anniversary year of the enactment of the ground-breaking Trade Practices Act 1974 (Cth) now confusingly renamed as the Competition and Consumer Act 2010 (Cth). The rebranding of the legislation gave the Parliament the opportunity to introduce Div 1 of Pt 4 of the Act, commencing with a particularly telling example of the Commonwealth drafting technique. Section 44ZZRA commences a 20-page long labyrinth with the disarming words: ‘The following is a simplified outline of this Division.’ I will say a little more later about the byzantine complexity of the cartel conduct provisions. They are illustrative of what I think is a fundamental issue that profoundly affects the way in which our lives are regulated and the burdens for those who must obey the law in coming to grips with the constraints imposed by such drafting.
I also propose to discuss the real difficulties that the complexities of modern life throw up for legislative drafting and the striking of the balance between ensuring that the objective policies which the Parliament wishes to have reflected in its laws are observed rather than evaded.

Complexity in legislation has costs and benefits. One significant area of costs that I will discuss includes compliance with ‘red tape’ — in substance the cost to citizens and businesses of complying with the legislation and dealing with it in any legal context, including carrying on business, the drafting of contracts, the structuring of transactions or dealings and court proceedings. Each of these is affected by the need to ensure that one is complying with the letter — or telephone book — of the law as well as its purpose, in all of the very many aspects of that the legislation has sought to cover.

One significant impact of this that has emerged in the last 30 years is the exponential growth in the time it takes for litigation to be conducted and the difficulty that ordinary people, as well as businesses big and small, face from the prospect of and then, if worst comes to worst, the conduct of litigation.

Cartels: a first priority for the ACCC
Author: Russell Miller AM

Cartels, both domestic and international, continue to be a central focus for the Australian Competition and Consumer Commission (ACCC), as they are with competition agencies around the world.

  • 'Reasonable endeavours' and 'the objective approach': Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7
    By Julian Zmood
    page 3
  • Striking the modern balance between freedom of contract and consumer rights
    By Steven Rares
    page 7
  • Competition, fairness and the courts
    By Steven Rares
    page 17
  • Cartels: a first priority for the ACCC
    By Russell Miller AM
    page 29
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