Skip to 0 minutes and 4 secondsPROFESSOR 1: Contract law provides certainty for the wheels of commerce. It's going to regulate the relationship between legal parties when they have transactions. It doesn't just regulate the transactions. It regulates the dispute resolution if things go badly. It regulates how they start, how they end, and the terms in the middle. So without that certainty, without knowing that the exchange that we make is going to be fulfilled in the way we expect it, how would our economies actually function if we weren't actually certain that this is going to have the result that we all intend it to have? We wouldn't be able to make any deals, and the economy would basically stop.
Skip to 0 minutes and 44 secondsPROFESSOR 2: Basically, contract is all around us. We enter into several contracts almost every day. So it's interesting when you think of it that way and you get into how it is governed. What are your rights, and what are the rights of the other parties? You might be entering the contract not knowing, but once you understand what contract is and what a law is and what your rights are, what your obligations are when you enter into contracts, it helps you. It guides you as you go along.
Skip to 1 minute and 20 secondsPROFESSOR 3: The starting point of the law in relation to contracts is this notion of freedom of contract, two parties without the interference of the law are able to come along, argue out, have a bargain, reach a price for what they're going to sell. And really the law is only to make sure that if you intended to have that bargain and one of the parties breaches their promise, the law will come along and help in those circumstances. So that's a starting point of the law. However, over time we've had-- particularly in the 20th and the 21st century-- the development of major companies. Huge companies that mass produce goods and sell to a mass market.
Skip to 2 minutes and 0 secondsSo you don't really have one boot maker selling to one buyer or one candlestick maker to a buyer where there's much more evenness in the bargaining position. Really, we've evolved to a situation where we have one party. It's huge, and the other part is just little you. So there's obviously an imbalance. And often contracts are on a take it or leave it bases. You buy on the terms that I sell it to you or forget it. So there's no real bargaining going on. So the law has realized that at least in relation to some contracts, particularly consumer contracts, there is no real genuine equal bargaining power.
Skip to 2 minutes and 43 secondsAnd so the law will intervene in that situation and force certain conditions to apply to those arrangements regardless of what the parties intent. And I guess the question is at what point is the law interfering too much? And to what extent is the law just balancing things up and keeping things on a fair and even basis?
Skip to 3 minutes and 5 secondsPROFESSOR 2: There's a general misconception that contracts must be of some specific form and must be in writing. They must be signed. Maybe celebrated and toasted. Many people don't realize that we enter into contracts all the time, and they're simple contracts. You get on the bus to be taken from one point to another. You've entered into a contract of carriage to be transported. You bought petrol. You've entered into a contract. So most contracts don't need to be in writing, don't need to have any special celebration around it. There are only a few contracts of common law that will require some special forms of documentation.
Skip to 3 minutes and 55 secondsEven those are actually required by statutes going back to statues now commonly called a statutes of frauds of 1667, which introduced that certain types of contracts must be in writing or at least must be evidenced in writing. So you can have your contracts, and then put it in writing. In Australia, especially in Victoria where we are, there are only two types of contracts that need to be evidenced in writing, contracts relating to land and contracts of guarantee. But otherwise, any other contract doesn't have to be in writing.
Introduction to contract law
Watch Melissa (Deputy Director, Castan Centre for Human Rights Law & Senior Lecturer, Faculty of Law), Emmanuel (Associate Professor, Faculty of Law) and Justin (Professor, Faculty of Law) talk about contract law, how it regulates relationships between legal parties when undertaking transactions and how contracts are a part of our everyday life.
Within the Comments, consider sharing with other learners your thoughts on the following questions:
- Can you remember and count up how many contracts you’ve entered into this week?
- What are some of the biggest and most life-changing contracts you’ve entered into?
- Have you ever sought legal advice or help when a contract has gone bad or you cannot complete the obligations you originally agreed to? What was the process that worked best for you?
Don’t forget to contribute to the discussion by reviewing the comments made by other learners, making sure you provide constructive feedback and commentary.
Go to Downloads for a link to Contract law - essential legal knowledge, a document that provides more detail on contracts, how they begin and what can be done when things go wrong.
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