“Foreign law can play an important role for law students … in order to give them a better understanding of their own legal system. … The students begin to see their own legal system from a new point of view and with a certain distance; they realize there is nothing God-given about its rules. For this purpose, substantive foreign law should be taught within the framework of all regular courses, even if only by way of a few well-chosen examples rather than in a consistent and comprehensive way.”^[1]

This Chapter makes a few concluding observations about the topics examined within this book. The aim is to place the discussed area of law in some form of context, with particular emphasis on the international dimensions of the subject matter.

It is of the outmost importance that the reader is aware of the fact that the Australian rules, studied in previous Chapters, are not necessarily the only plausible approach to addressing the constant balancing of the need to uphold party autonomy on the one hand, and the need for limiting party autonomy due to public policy, on the other hand. By examining foreign legal systems, the one gains an appreciation for the fact that more often than not, foreign law is rather similar to Australian law. This is only natural as the legal systems of different states typically are faced with the same task of balancing competing interest.

Looking at the relevant law in the United States of America, for example, one finds that the Uniform Commercial Code could, in many ways, be said to be the US equivalent of the other Common Law countries’ Sale of Goods Acts. For instance, Article 2 of the Uniform Commercial Code deals with many of the areas covered by the Sale of Goods Acts but goes beyond those Acts. For example, § 2-302 deals with unconscionable contracts or clauses:

This provision has been applied in numerous cases, and courts have generally preferred it to traditional common law actions such as undue influence, duress and misrepresentation.^[2] This highlights the overlap that exists, both in US law and Australian law, between the various causes of action that may be taken to avoid a contract. The provisions popularity may arguably be attributable to the drafting style. In contrast to the unconscionability provisions of the ACL, this provision is short and general in its scope of application.

As far as the implied terms are concerned, the following provisions are of interest:

These provisions bear obvious similarities to the terms that may be implied under the SGA and the ACL in Australia.

Finally, it is interesting to note the similarity between how the term “goods” is defined in the Sale of Goods Acts and in the Uniform Commercial Code:

These brief examples have illustrated some similarities and some differences between Australian law and the laws of foreign countries. While the picture painted is necessarily incomplete, it should hopefully illustrate that, only when having the benefit of materials of a comparative nature can we fully appreciate and evaluate the rules studied so far. it should be clear that while Australian law is different to that of other countries in some respects, both the Australian system, and the systems of other countries, work. All legal systems can be criticised, but the above has highlighted that different solutions may be adopted to deal with the same problem, and all of those different solutions may more or less effectively address that problem.

Having made these observations, a few words must be noted as a very brief introduction of the scope and functions of public international law and private international law. Then the so-called Vienna Sales Convention is analysed briefly.

8.1 International law and the law of obligations

This Chapter will not deal with public international law or private international law (frequently referred to as conflict of laws in Common Law countries) in detail. Public international law is an enormously diverse discipline. In its strictest, and now arguably outdated, sense, it could be said to be concerned with legally binding rules and principles regulating the relationships between sovereign States. Areas ordinarily dealt with within the scope of public international law include, for example, the law of treaties, issues relating to territory, statehood and State responsibility, international dispute settlement and international use of force; none of which are of any direct relevance for the law of obligations. Private international law, on the other hand, is of direct relevance to the law of obligations, but will nevertheless only be discussed briefly.

While they may very well originate in international instruments, rules of private international law are domestic. They are rules, in one way or another, decided by each State, and are in place to regulate essentially four questions:

(1) when a court may exercise jurisdiction over a dispute;

(2) when a court may decline to exercise jurisdiction over a dispute falling within its jurisdiction;

(3) which country’s law the court should apply in a dispute falling within its jurisdiction; and

(4) under what circumstances a court may recognise and/or enforce a foreign judgment.

The connection between private international law and the law of obligations is obvious. In fact, the rules of obligation, outlined in the Chapters above, will only ever be of relevance if the court hearing the matter decides that Australian law is applicable.

Imagine, for example, that you bought a book from a website of a corporation based in New Zealand. Imagine further that the New Zealand-based web company delivered a book that did not match the description on the website, and that they refused to exchange it. In such a situation you might immediately start thinking of implied terms, consumer guarantees, ACL s. 18 and common law misrepresentation. However, the first thing you should consider is where you can sue if you want to take the matter to court.

Suing in New Zealand has the advantage of giving you an easy path to having a favourable judgment enforced – after all, the company most likely has assets in New Zealand, and the courts of New Zealand will obviously assist in the enforcement of a New Zealand judgment. On the other hand, taking legal action overseas is typically more complicated than taking action at home, which speaks in favour of suing the company in Australia. Furthermore, if you sue in Australia, it may be more likely that the choice of law rules will point to Australian law being applied.

If you sue in New Zealand, it may be more likely that New Zealand law will be applied, which would mean that you cannot rely on, for example, the ACL. In addition, if you sue, and win, in Australia, you will have to take the judgment to New Zealand and ask the courts there to enforce it, unless the company has assets in Australia. Even without discussing the complications that arise from the courts’ discretion to decline to exercise jurisdiction over a dispute falling within its jurisdiction, the above highlights the complexities of cross-border litigation.

Finally, while the intricacies of choice of law rules go beyond the scope of this Chapter, it is to be noted that particular issues may arise in the context of the law of obligations. For example, one of the areas discussed above is illegality. Determining against which country’s law the illegality of an international contract is to be measured is not always easy and close attention must be given to the relevant choice of law rules.

8.2 United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention)

As far as Australia is concerned, the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 11 April, 1980), as implemented through the various Sale of Goods (Vienna Convention) Acts, is arguably the most relevant international instrument to be considered in the context of the law of obligations.

This convention, ordinarily referred to as CISG or the Vienna Sales Convention, has been widely adopted. At the time of writing 94 countries are parties to the CISG, with the noted exceptions being the United Kingdom and India.^[3] The convention sets out several rules overlapping with what has been discussed above.

Article 1 of the Sale of Goods (Vienna Convention) Act 1986 (Qld) makes clear that the convention only regulates contracts of sale of goods between parties whose places of business are in different (Nation) States, and only where the parties are aware that their respective places of business are in different (Nation) States. The application of the convention is further restricted to situations where the States that the parties have their respective places of business in are Contracting States. Or where the rules of private international law led to the application of the law of a Contracting State. In other words, the convention is applicable when:

1. the parties are aware that their places of business are located in different (Nation) States, both of which are Contracting States; or

2. the parties, who are aware that their places of business are located in different (Nation) States, have their dispute heard in a jurisdiction, under which rules of private international law the applicable law is that of a Contracting State.

However, as is made clear in Article 2, the Convention is not applicable to all types of contracts:

Thus, what ordinarily is referred to as consumer contracts fall outside the scope of the Convention, provided that the seller had actual or constructive knowledge of the fact that it was contracting with a consumer. In this context, it is to be noted that s. 68 of the ACL states that: “The provisions of the United Nations Convention on Contracts for the International Sale of Goods, done at Vienna on 11 April 1980, as amended and in force for Australia from time to time, prevail over the provisions of this Division to the extent of any inconsistency.” Consequently, where an Australian consumer enters a contract with a foreign corporation located in another Contracting State, it is essential for the consumer to make sure that the seller has knowledge of the fact that the consumer is buying the goods “for personal, family or household use”. Failure to do so means that the consumer loses the right to rely on the favourable provisions of Part V Division 2 and must instead rely upon the rules of the convention. Similarly, where the proper law of the contract is that of a Contracting State other than Australia, and that is not due to any term of the contract,^[4] it is essential for the consumer to make sure that the seller has knowledge of the fact that the consumer is buying the goods “for personal, family or household use”.

Before discussing CISG further, it is interesting to contrast the brief definition of consumer contracts found in Article 2 with that of s. 3 of the ACL (see 2.6.1.1).

Further limitations to the scope of the convention are found in Articles 3, 4 and 5. Most importantly for our purposes, “[c]ontracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production.”^[5] And, the convention “does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services.”^[6] These provisions help distinguish between contracts for service, contracts of sale and contracts for work and materials.

Subject to some limitations, Article 6 gives the parties the right to exclude the application of the Convention or derogate from or vary the effect of any of its provisions. In that sense, the convention is similar to the SGA, and different to the ACL.

The Convention regulates a range of areas of contract law including the formation of the contract and the passing of risk. The area of interest for the law of obligation is found in Chapter II, Section II, of the Convention.

Articles 35 contains rules relating to several of the implied terms that have been discussed above (see Chapter 2):

The buyer must “examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances” (Article 38(1)). Further:

Articles 41 and 42 regulate the buyer’s right to title:

Similarly to what was said in Articles 39 and 40, the buyer loses the right to rely on Articles 41 and 42 if “he does not give notice to the seller specifying the nature of the right or claim of the third party within a reasonable time after he has become aware or ought to have become aware of the right or claim” (Article 43(1)). However, “[t]he seller is not entitled to rely on the provisions of the preceding paragraph [i.e. Article 43(1)] if he knew of the right or claim of the third party and the nature of it” (Article 43(2)).

As is clear from the above, the Vienna Sales Convention, as implemented through the various Sale of Goods (Vienna Convention) Acts, contains rules overlapping the terms implied under the SGA and the consumer guarantees of the ACL, as well as common law. It is also clear that, while differences exist, the rules of the Vienna Sales Convention are rather familiar to those who have studied the provisions of the SGA and the ACL regulating implied terms/consumer guarantees. Furthermore, similarities can also be found in relation to the provisions regulating remedies.^[7] However, the provisions relating to remedies will not be discussed here.