1. Contract & Consumer Law
Chapter 1
The Framework of the Australian Legal System

2. Introduction The current legal system is derived from several sources:
Legislation - laws created by Parliaments
Case law (common law) - decisions handed down by the courts
Principles of ‘equity’ - procedures to provide fairness and equitable remedies in those situations where common law is considered too strict and narrow

3. 1.1 Origins of Law in Australia
When the First Fleet in arrived in Australia in 1788, this marked the beginning of British law being enforced in Australia. In 1901, Australia was declared a nation after amalgamation of British colonies around Australia. Despite achieving ‘independence’ the Australian legal system is still highly influenced by the British government. For instance, within our constitution, the monarch of Great Britain, currently Queen Elizabeth II, can legally impose laws in Australia as well as dismiss the Australian Prime Minister.
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4. 1.2 The Australian Constitution
Australia operates under a federal system of government.
This means there is a division of law-making power between the central Commonwealth government and State governments.
When the Commonwealth government makes a law it applies to all States and Territories.
When a State government makes a law it only applies within that particular State.

5. The Australian Constitution
The Commonwealth government cannot simply make laws about whatever it chooses and must act within the limits of the power given to it by the Constitution.
If a law made by the Commonwealth government is challenged by a claim that it falls outside the limit of its powers, the dispute is referred to the High Court of Australia.

6. Categories of Law Making Powers
There are three key categories of law making powers:
Exclusive powers
Concurrent powers
Residual powers

7. Division of Powers S. 51 Specific Powers Examples:
S.109 states that if there is a conflict between Commonwealth, the Commonwealth will prevail.
S. 51 Specific Powers
RESIDUAL POWERS
Held By the States
Examples:
Education, Hospitals, Roads and Transport
EXCLUSIVE POWERS
Held By The Commonwealth
Examples:
Customs and excise, Currency, Military
CONCURRENT POWERS
Shared Between Commonwealth and the States
Examples:
Taxation, Industrial Relations, Banking

8. Strengths of Australian Federalism
Federalism divides and limits the power of central governments, protecting individuals from one all-powerful government.
Federalism provides increased choice - Voters can vote for one political party at the State level and another at the national level for example.
Encourages co-operation between States and Commonwealth – e.g. proposals being more thoroughly debated and thought through.

9. Weaknesses of Australian Federalism
Federalism can lead to duplication of government and inefficient, overlapping or contradictory policies in different parts of the country.
Federalism can lead to inequality between the States.
Federalism can lead to neglect in an important area of public policy.
Could result in our nation becoming over-governed.
In relation to business, federalism has meant differences on a State by State basis, and sometimes duplication and confusion in many areas such as business and trade licensing, taxation etc.

10. Referendum
S.128 of the Constitution states that the only way to change an actual provision of the Constitution is by calling a referendum.
A referendum is a nationwide vote where citizens are asked to say either ‘yes’ or ‘no’ to a proposed change to the Constitution.

11. Judicial Interpretation by the High Court
The High Court has the jurisdiction to hear dispute that arise from the Constitution or cases involving disputes regarding the interpretation of the Constitution.

12. Referral of State Powers to the Commonwealth
Commonwealth power has increased in the area of commercial law as a result of the referral of State law-making power to the Commonwealth government, provided for under s51 (xxxvii) of the Constitution.

13. 1.3 Types of Law
Public Law
Public Law involves laws relevant to all in society. It deals with the structure of government, the relationship between governments and the relationship between governments and citizens.
Private Law
Private law deals with the relationships between individuals and private corporations and organisations.
Criminal Law
A unlawful act which involves harm to society in dealt with by the State government, as they prosecute in legal proceedings.
Civil Law
Civil laws concerns wrongdoings which are not necessarily a problem for society, but a party.

14. 1.4 Sources of Law
The application of commercial law within Australia is subject to legislation, common law and equity, which together form case law.
Main sources of law:
Legislation
Delegated legislation or subordinate legislation
Common Law
Equity Law

15. Sources of Law STATUTE LAW COMMON LAW
STATUTE LAW
COMMON LAW
Passed by Parliament and Subordinate authorities
Can be referred to as Legislation or Statute law
Laws made by Judges
Can be referred to Common law (Case law) OR
Statutory interpretation
Criminal
Civil
Criminal
Civil

16. Legislation
Legislation is law made by the elected Parliament and it is also referred to as statute law or enacted law. The parliament can delegate its law-making powers to an executive body.

17. Common Law
Common law is when judges make decisions on disputes brought before them, on a case-by-case basis. At the heart of this system is the concept of precedent - This means that if a case with particular facts has been previously decided by a higher court, a lower court hearing a similar case at a later date is bound to follow the decision of the higher court.

18. Common Law
If a similar case has been heard in a court from a different hierarchy, or lower in the same hierarchy, then the precedent is only considered to be persuasive. This means the judge hearing the case may be influenced by the decision, but it is up to them whether or not to follow it.

19. Equity Law
Equity, the law of ‘fairness and good conscience’ was developed to provide fairness in those cases where the common law was unable to.
Equity provides alternative remedies in cases where money simply cannot resolve a dispute, or where technicalities would result in an unfair result at common law.
Equitable remedies include:
1. An injunction - an order by the court requiring a person not to do something.
2. An order for specific performance - an order by the court requiring a person to complete the conduct they promised to perform in a contract.

20. 1.5 Court Hierarchy

21. 1.6 The Trial Process The Adversarial Trial System
Australian courts are adversarial, as opposed to inquisitorial, in nature. This means that two opposing parties can pick apart each others arguments until the truth is finally revealed.
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22. Tribunals Tribunals play an important part in resolving disputes.
They are specialised bodies set up by governments under specific legislation which gives them power over specific types of matters.
Hearings are less formal than courts and are designed to deal with matters in a speedier and simpler manner.
They are less costly process than going to court.
Tribunals offer more flexibility than going to court.

23. 1.7 Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) is another option for resolving a dispute and is often preferable to costly and time-consuming litigation. The two main types are:
Mediation – Parties meet with an objective third party (meditator) to resolve the dispute in an informal setting
Arbitration – Parties submit their dispute with an objective third party, who unlike a mediator, will enforce a legally binding resolution.

24. 1.8 Rule of Law
Australia’s legal system is based on ‘Rule of Law’ which states how the legal system operates and rights of individuals and entities in matters of legality.

25. 1.9 Legislation and its Interpretation
The language used in law can be complex and difficult to interpret. As such, there are legal definitions developed for almost any term that would be used in law proceedings. This is a means of creating a single, clear and complete understanding for anyone attempting to interpret the information.

26. 1.10 International Law
International law governs the relationship between different nations and their citizens. International laws are usually created when two or more countries make an agreement in the form of a treaty or convention.

27. 1.11 State and Commonwealth Resources
State and Commonwealth resources relating a particular jurisdiction can be found online as such information is always available to the public. State governments and the Commonwealth government also provide their own ‘homepages’ which are essentially portals for information and services relating to the region in question.
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