The Law Handbook
Your Practical Guide to the Law in New South Wales

11th edition

Contracts

12
Author Carolyn Penfold, UNSW, Sydney

The information contained in this document is as up-to-date and as accurate as possible at time of publication in August 2009.

340 The Law Handbook A consumer is a person who acquires goods or services for personal or household use. We are all consumers. Most consumer dealings, whatever their size, cost or importance, are based on a contract. The basic principles of contract law are discussed in this chapter. These apply to purely commercial transactions (such as between a manufacturing business and its supplier), as well as transactions where one of the parties is a consumer.

The development of contract law
Contracts under common law
Contract law is largely a product of the common law – it has been developed by the courts rather than by parliament passing laws. A basic common law principle is the assumption that a contract is a bargain made freely between equal parties (freedom of contract). Because of this, courts have been unwilling to set aside or alter contracts except in very limited circumstances. Even where there has been unfairness or sharp practice the principle of sanctity of contract has generally prevailed, and contracts have been upheld. not the equality that contract law has traditionally assumed. Limited bargaining opportunity In practice there is usually little opportunity for bargaining – goods and services are typically offered to the consumer on a ‘take it or leave it’ basis, under a standard form contract (where the contract is in writing).

Consumer legislation
To some extent, the common law of contract has evolved to take account of these marketplace developments. The major force for change, however, has come not from the courts but from state and federal parliaments. Particularly since the