COVID-19 has presented new challenges and complexities that may affect the way consumer and business contracts factor in unforeseen circumstances in the future, according to an expert from The University of Western Australia’s Law School.
Dr Sagi Peari from UWA’s Law School said COVID-19 had caused a great deal of turmoil for both consumers and businesses with a situation for contract law that was unprecedented.
“Businesses are really suffering with a wave of cancellations for products and services, and consumers are also struggling to understand what their rights are and what financial decisions to make,” Dr Peari said.
“It’s a difficult time for us all, and the intricacies of contract law have become even more complex right now. It is making us scrutinise the impact of unforeseen events and the effect that they may have on the nature of contracts in the future.”
Dr Peari said the timing of when the contract was taken out was important.
“A contract taken out before the pandemic was announced by the World Health Organization on 11 March 2020, will be treated in most cases differently to contracts signed after that declaration,” Dr Peari said.
“It’s also critical to understand the difference between the legal doctrines in various jurisdictions.
“A contract signed with a company from Victoria may end up with a different legal outcome than one signed with a company from WA. The states of Victoria, NSW, and SA have a different vision of legal doctrine that deals with unforeseen circumstances. Similarly, many countries have a different understanding of how the law works in those situations.”
Dr Peari said if focusing on protection of Australian consumers, the lessons of COVID-19 suggested the need to eliminate uncertainties in the future.
“In the next review of Australian Consumer Law it may be worth considering a provision that will automatically safeguard the interests of Australian consumers on the point of unforeseen events,” he said.
“Presently, we have those safeguards mainly in relation to quality and fit for purpose of products and services. From the lessons of COVID-19, we could consider extending them to unforeseen circumstances.”