There is no, and arguably can be no, exact definition of what the “law of obligations” encompasses. Indeed, the “law of obligations” is given different interpretations in different contexts.

 

In some Civil Law countries, the concept is widely accepted and refers to a relatively well-defined area of law. For example, in German law, the law of obligations (Schuldrecht) can arguably be separated from other areas of law by reference to the fact that the German Civil Code (Bürgerliches Gesetzbuch) has a separate Book on the law of obligations. In other Civil Law countries, such as Sweden, the concept’s definition is less certain.^[1]

 

In Common Law countries like Australia, reference is seldom made to a “law of obligations”, and unlike their European counterparts, most Australian law degrees do not include a subject on the law of obligations. Instead, Common Law countries traditionally seem to have taken the view that it is possible, and desirable, to draw a clear distinction between the various areas of law making up the law of obligations.

 

One legal dictionary defines the law of obligations as:

An umbrella term for contract, tort and restitution. The phrase is sometimes used to reflect the theory that there is not a general law of contract, tort, or restitution; rather, there is a general law of obligations, which is manifested in particular forms of contracts, torts, and responses to unjust enrichment.^[2]

 

The term the “law of obligations” is consequently imprecise and can rightfully be criticised as being no more than “a name for a bundle of rules that on the whole have little in common.”^[3] On the other hand, the concept is very useful in bringing attention to the existing, and indeed increasing, overlap between various areas of civil law. Despite the impression one may get from law school curricula, it is, for example, not always clear where contract law starts and torts law ends. Furthermore, with legislation such as the Competition and Consumer Act 2010 (Cth) affecting both contract law and torts law, the boundaries are being blurred, and the necessity of viewing contract law and torts law as parts of something larger becomes both clear and indisputable. Indeed, with the significant increase in how various forms of consumer protection law affects contract law and torts law in recent years, it could be argued that the distinction between public and private law is also becoming less clear.

 

This book focuses on how Australian law addresses a selection of particularly interesting topics falling within the “law of obligations”.^[4] The topics addressed include common law rules of contract, tort and, to an extent, restitution. They also include certain principles of equity and relevant statutory rules as found in, for example, the Competition and Consumer Act 2010 (Cth) and the various Sale of Goods Acts.

 

1.1.1 The overriding theme

One recurring theme throughout the law of obligations is the constant balancing of the need to uphold party autonomy, on the one hand, and the need for limiting party autonomy due to various public policy concerns. In more detail, the public policy issue referred to can be divided into three separate categories:

1) the protection of the weaker party;

2) the need for contracts to be effective; and

3) other public policy considerations.

 

If expressed in the form of the “Rules” used in this book to summarise the law (see 1.2.3), the overriding theme of the law of obligations could be described as follows:

Rule 1

 

1. The parties’ autonomy to determine the content, form and effect of their contract may be limited only where such a limitation is necessary in order to:

(a) provide justified protection of the weaker party to the contract;

(b) give the contract attributes needed for it to be enforceable; or to

(c) achieve other justified public policy objectives.

 

2. The limitation of party autonomy envisaged in Article 1 must be proportionate to the aims the limitation seeks to achieve.

 

 

 

As expressed in Rule 1, the parties’ right to determine their respective obligations should not be lightly disturbed. In fact, at least one learned scholar has gone as far as to suggest a “human rights basis for party autonomy”.^[5] At the same time, as also is expressed in this Rule, there are overwhelming public policy reasons motivating the restriction of party autonomy. The Chapters below all relate to how Australian law seeks to balance those public policy reasons against party autonomy.