Unfair Terms Contract

1. Analyzing Chris Willett’s “The Functions of Transparency in Regulating
Contract Terms - UK and Australian Approaches”
Question 1:
What is the purpose of comparative legal research? Why does the author undertake such
research in this article?
Answer 1:
The importance of comparative law in the ever increasing globally linked world cannot be
ignored or denied. The essence of comparative law is to compare the law of one country to
that of another to understand the differences and try to draw a conclusion there from1
.
Generally, the author tries to juxtapose the law of one country to that of another or the
researcher may even compare the law of several jurisdictions, such as common law and civil
law countries. The essence of comparison of law from several different countries is to find
out the similarities and differences2
. The author of such work generally tries to assess such
data with a particular purpose of establishing the differences or similarity in development of
law in different jurisdictions. Comparative legal research is also undertaken to search for
universal principles of law that transcend culture and provide a meeting point of law3
.
Sometimes, comparative legal research also serves the purpose of solving important public
policy questions regarding consumer law, anti-trust law or intellectual property law. It also
helps in shaping new law and providing legislators and the judiciary with an overview of the
development of law in foreign countries4
. Overall, comparative legal research tries to find
answers to the differences and similarities between the legal developments in different
countries.
The author undertakes comparative legal research in this article because he tries to
understand the uncertainty in both the UK and Australian approaches to unfair contract terms
1
Edward Eberle, ‘The Method and Role of Comparative Law’ (2009) 8 (3) Washington University Global
Studies Law Review 452.
2
Ibid 452.
3
Ibid 453.
4
Ibid 456.

2. and the scope of transparency to legitimize such unfair terms in UK and Australia5
. The
author compares the development of consumer law in UK and Australia as well as in the
European Union (EU) and Germany to establish that there is still uncertainty about whether
transparency can legitimize unfair terms of consumer contracts. The author questions the
legal tension between the ethics of informed freedom of choice that needs to be provided to
the consumers and the “irreducible substantive rights” of consumers when it comes to trader-
consumer relationship6
. Thus, the author tries to imply that the legislators of the two
jurisdictions, UK and Australia should make it clear whether transparency is capable of
legitimizing unfair terms. Further, the author argues that voluntarily used terms must be
transparent to allow post contractual justice so that consumers can easily assert and bargain
their rights after entering into the contract. Lastly, the authors undertake this research to
assert the importance of transparency in consumer legal rights and compares UK and
Australia law to conclude that the UK “misleading omissions” concept provides better
transparency compared to the “misleading practice” concept used in Australia7
.
Question 2:
Explain the ‘presumption of similarity’ and the ‘presumption of difference’. Where do you
think the author might stand in this methodological debate?
Answer 2:
Comparative law serves a functionality which aims at discovering the unity of thought and
similarities between different jurisdictions8
. Methodology of legal research varies from one
scholar to another and there are certain differences in their assumptions and presumptions.
The presumption of difference was enumerated by Pierre Legrand and according to him legal
research must always set out with the presumption that there is no similarity between the
5
Chris Willett, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches’
(2011) 60 (2) International and Comparative Law Quarterly 384.
6
Chris Willett, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches’
(2011) 60 (2) International and Comparative Law Quarterly 384.
7
Ibid 385.
8
Antonios Platsas, ‘The Functional and Dysfunctional in the Comparative Method of Law: Some Critical
Remarks’ (2008) 12 (3) Electronic Journal of Comparative Law 11.

3. legal outcomes of different jurisdictions9
. Presumption of difference goes to the root of legal
knowledge of any particular country and states that there can be no similarity in such
knowledge due to the different culture, historical background and development of law in such
two different countries. According to Legrand, comparative legal research should set out with
a presumption of difference instead of a presumption of similarity. He argues that comparison
of two different elements and legal systems must logically imply difference and deny
sameness10
. Presumption of difference always sets out legal research with the thought that
two opposing legal systems can have no similarities. Difference is at the root of the legal
system because development of law has occurred under different circumstances in the two
countries.
However, Legrand’s treatise is in stark comparison to the seminal work of K Zweigert and H
Kotz “An Introduction to Comparative Law”11
, in which they have proposed the thesis idea
praesumptio similitudinis, which implies that there is a presumption of similarity of practical
legal results amongst different legal systems12
. According to the “presumption of similarity”,
although jurisdictions, legal methods, approaches may vary in domestic laws of different
countries, but inherently the practical results are broadly similar13
. Modern legal scholars and
researchers believe in the idea of “presumption of similarity” because in the age of
globalization and convergence, legal systems of different countries bear more resemblance to
each other than to their own history14
. Present day legal researchers have negated the theory
of Legrand and adopted the idea of Zweigert and Kotz because they believe that the end
result of legal research is to look for similarities in the legal purposes of two different
jurisdictions15
. The presumption of similarity sets out that although there might be cultural,
political, religious and economic or even legal differences in two different countries but the
purpose of law cannot be held to be much different in two different jurisdictions.
The methodology of the author of the present article is that of presumption of similarity. The
author sets out to find whether transparency has a legitimizing effect on unfair terms of a
consumer contract. To this effect the author tries to understand the development of consumer
law in UK and Australian jurisdictions and alterations in unfair terms. However, in the
9
Geoffrey Samuel, Law of Obligations and Legal Remedies (2nd
edn Cavendish Publishing 2001) 538.
10
Ibid 538.
11
K Zweigert and H Kötz, An Introduction to Comparative Law (3rd
edn Oxford University Press, Oxford 1998)
12
Ibid 40.
13
Ibid 40.
14
Antonios Platsas, ‘The Functional and Dysfunctional in the Comparative Method of Law: Some Critical
Remarks’ (2008) 12 (3) Electronic Journal of Comparative Law 12.
15
Ibid 12.

4. introduction of the article itself, the author sets the tone that he presumes that the law in UK
and Australia is confusing when it comes to whether transparency is capable of legitimizing
unfair terms. Thus, the author looks to start his comparative legal research on a set hypothesis
and presumption of similarity and later concludes that his hypothesis is true on analysis of the
legal developments in UK and Australia.
Question 3:
Evaluate the author’s choice of jurisdictions to be compared.
Answer 3:
In the present research article, the author compares the unfair terms in consumer contracts
and the role of transparency in legitimizing such unfair terms. The main purpose of this
research work is not just to elaborate that transparency has failed to legitimize unfair terms
but also to establish that the role of transparency in legitimizing unfair terms has been much
clouded by judicial interpretation, legislations and legal developments in UK and Australia.
The author compares the development of law in two common law jurisdictions in the context
of EU level regulation with references to civil law approaches. However, the development of
consumer law and interpretation of unfair terms has been very confusing in UK and
Australia. Through this comparative legal research, the author tries to set out the need for
certain changes in public policy and consumer law so that the legislators of the corresponding
countries would alter the law accordingly. Further, the author also compares the development
of law in the European Union and its impact on the development of law in UK. Lastly, the
author also compares consumer law and law relating to unfair terms in the civil law country
Germany, to remark that at least the German law explicitly states that transparency is not
necessarily a legitimizing factor since unreasonable disadvantage may be caused to the
consumer in substance, irrespective of transparency16
. This form of clarity is required in the
UK and Australian law. The author’s choice of countries for comparative legal research is
limited to common law countries and very few civil approaches. This is one major drawback
for this research work because it sets out with a basic premise about how transparency is
important but fails to expand the comparison of consumer law and unfair terminology in
16
Chris Willett, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches’
(2011) 60 (2) International and Comparative Law Quarterly 365.

5. different jurisdictions. However, the author still manages to elaborate the importance of
transparency of unfair terms in consumer law. The author has rightly selected UK and
Australia as the point of discussion because both these countries have developed their law
through judicial precedents and legislations. However, legislations and judicial interpretation
of the two countries has resulted in conflicts and confusion which requires further legislation
to set out clearly whether transparency has any role in legitimizing unfair terms of consumer
contracts.
The author’s choice of jurisdictions to compare development of consumer law is legitimate
and reasonable because the UK law has been much influenced by EU law such as the
UTCCD (Unfair Terms in Consumer Contracts Directive) while the Australian federal law
was passed in 2010 following several suggestions and amendments to New South Wales
Contracts Review Act, the Victorian Fair Trading Act and passing of various important
judgments17
. The role of comparative law is to understand the development of law over time
in different circumstances at different jurisdictions and the author has been able to portray the
same. Further, through the comparison of legal developments in UK and Australia the author
has been able to reach an important conclusion that transparency plays several other roles in
helping consumers to understand terms, in furthering market discipline and in providing
consumers post contractual access to justice18
. Dealing with public policy and enumerating
the importance of transparency in unfair terms, the author has been able to justify selecting
UK and Australia to compare the state of law in these two jurisdictions.
Question 4:
To what extent does this article embody prescriptive legal scholarship, or is it merely
descriptive? Justify your answer and evaluate the approach adopted.
Answer 4:
This article embodies prescriptive legal scholarship because it does not merely describe how
the consumer law is and what is the difference in unfair terms interpretation in UK and
Australian law, but it also prescribes how the law should be and why transparency of unfair
terms is important for the development of consumer law. Understanding legal scholarship is
17
Chris Willett, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches’
(2011) 60 (2) International and Comparative Law Quarterly 356.
18
Ibid 357.

6. important for evaluating the importance of any legal research work. The present article sets
out with the development of law in interpreting unfair terms in consumer contracts in UK.
The author’s approach towards the legal research has been appropriate since he tries to
describe how consumer contracts in UK used to be interpreted in the light of the unfairness
test which supported the idea that transparency cannot legitimize substantive unfair terms.
However, by introduction of the good faith doctrine, the role of transparency in legitimizing
unfair terms in UK seemed to have been established, which again was shrouded in confusion
when the good faith doctrine was tossed for the test of significant imbalance to the detriment
of the consumer19
. Similarly, in Australia too, the law relating to transparency could
legitimize substantively unfair terms before the Victorian Fair Trading Act, 1999 was passed.
Once this legislation came into force, the role of transparency in legitimizing unfair terms
became nil20
. However, ever since the introduction of federal law in Australia, a small degree
of uncertainty in the role of transparency in legitimizing unfair terms in consumer contracts
has once again surfaced in Australia21
.
This article can be referred to as prescriptive legal research because the author does not
simply engage in comparative law for the sake of theoretical pursuits but he also tries to bring
forth the importance of transparency in consumer law and seeks legislative changes. The
author seeks a policy change and argues that voluntarily used terms should be transparent
since it furthers market discipline and consumer’s access to post contractual justice22
. The
author suggests that the UK and Australian legislators should improve the unfair terms law by
referring to the previous model of the contract law in the State of Victoria and the current
approach towards transparency taken by the European Union’s Draft Common Frame of
Reference (DCFR)23
. This legal article has the audience of legal scholars, jurists, advocates as
well as legislators so this article represents prescriptive legal scholarship. Further, the
author’s approach towards the subject has been to compare the development of consumer law
and unfair terms in two separate jurisdictions as well as civil law jurisdictions. Thus, the
entire research work and the approach of the author can be said to be justified and reasonable
because the author has been able to point out that transparency of unfair terms is important
while at the same time suggesting that any form of confusion in interpreting unfair terms
should be legislatively rectified in UK and Australia.
19
Chris Willett, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches’
(2011) 60 (2) International and Comparative Law Quarterly 366.
20
Ibid 357.
21
Ibid 357.
22
Ibid 357.
23
Ibid 357.

7. Bibliography
Eberle, E, ‘The Method and Role of Comparative Law’ (2009) 8 (3) Washington University Global
Studies Law Review 452
Platsas, A, ‘The Functional and Dysfunctional in the Comparative Method of Law: Some Critical
Remarks’ (2008) 12 (3) Electronic Journal of Comparative Law 11
Samuel, G, Law of Obligations and Legal Remedies (Cavendish Publishing 2001)
Willett, C, ‘The Functions of Transparency in Regulating Contract Terms: UK and Australian
Approaches’ (2011) 60 (2) International and Comparative Law Quarterly 355
Zweigert, K and Kötz, H, An Introduction to Comparative Law (Oxford University Press 1998)