Law Assignment: Herbert Hart, Australian Law and Contractual Issues

This law assignment explores several key areas of legal theory and practice. Part A examines Herbert Hart's concept of secondary rules, including rules of recognition, change, and adjudication, and their importance in establishing a functional legal system. Part B analyzes the Australian legal system, detailing its adversarial and inquisitorial features, the roles of common and statutory law, and the principles of fairness, transparency, and equality. Part C focuses on the case of Commercial Bank of Australia v Amadio, discussing issues of unconscionable conduct, genuine consent, and the application of the Australian Consumer Law (ACL). Finally, Part D addresses the doctrine of frustration in contract law, referencing the case of Taylor v Caldwell, to determine whether a contract can be terminated due to a supervening event. The assignment provides a comprehensive overview of these legal concepts and their practical applications.

Running Head: Law 1
Law

Law 2
Part A
As per the proposal given by the legal philosopher Herbert Hart, there are almost three
types of secondary rules which are required by under legal system to enforce the rules of law:
Rule of recognition- this rule is developed for the purpose of preventing the uncertainty
related to meaning of law. In other words, these rules provide certain meaning of the law. These
rules also state the procedure how other rules get the authority, which means it determine the
validity of other rules. This can be understood through example, enactment by Parliament or
judicial precedent or customary practice.
Therefore, it becomes necessary for tribe to develop rules of recognition for the purpose
of providing the clear view of the laws stated in the constitution, and it also help the other 20
families to understand the certain meaning of the law.
Rules of Change- for the purpose of amending the static nature of primary rules, it
becomes necessary for legal system to develop the rules of change. These rules state the method
related to make changes in the primary rules, which means how these rules can be replaced,
added or deleted. It must be noted that rules of recognition can also state the procedure for
making the changes. Therefore, while introducing and enforcing the rules, tribe must state the
provisions related to the rules of change for the purpose of ensuring that primary rules are not
absolute in nature and it can be changed as per the circumstances and need. These rules are also
necessary for prepare the followers to adopt the changes.
Rules of Adjudication- there rules are considered as most important rules by Hart
because these rules are developed for the purpose of providing remedy in case of inefficiency on

Law 3
the part of the social pressure. These rules gives power to the authorities for the purpose of
determining whether primary rules have been broken, and it also provides procedure for seeking
adjudication if these rules are broken. For enforcing the primary rules and ensuring that primary
rules are followed, it is necessary that rules of Adjudication are followed and recognized at both
individual and official level. Therefore, for enforcing the laws it is necessary to consider rules of
adjudication.
After considered above stated rules, tribes ensured that these laws can be easily
introduced and enforced among these 20 new families.
Part B
According to Hart, constitution of the Australia states the secondary rules. In Australia,
conventions are also applied because legal system of the Australia is completely based on the
English System.
Australian legal system mainly included two features that are adversarial and
Inquisitorial. These features are stated below (Hot Topics, 207):
The most important feature of Australian legal system is that it is adversarial in nature,
which means any issue between two parties related to any case are put forward by the legal
representative for the purpose of getting decision by independent decision maker that is Court or
Tribunal. The main aim of this decision maker is to hear the argument of both side parties and
then apply the law. Decision maker does not conduct any investigation, and this feature of the
Australian legal system is adopted from the British common law system.
On the other hand, inquisitorial system is completely different from the adversarial
system, and this system is operated in some other countries also such as in European Countries.

Law 4
Under this system decision maker play very important and broader role. This can be understood
through example, such as decision maker has power to questioning the witnesses, they have
power to determine the type and admissibility of the evidence, and they have power to conduct
the investigation also. However, from last 30 years concept of this system is adopted by the
Australian legal system also, especially in the area of antidiscrimination law because in this area
matter is investigated by the independent body before bringing the parties to the dispute together.
It must be noted that, at both state and territory level tribunal is the body which is considered as
the decision-making body for issues related to the discrimination. Investigation conducted by
decision making body is relevant before the presentation made by the party (Law Teacher, n.d.).
Under Australian Legal system, Court applied common law for the purpose of solving the
dispute between the parties, unless common law does not conflict with the statutory law.
Statutory law is the law which is made by the parliament, and this can be Federal parliament or
the parliament of a State or Territory. Laws made by parliament are introduced as bills and these
bills are passed by the two houses of the parliament. These two houses approved the bills then
such it becomes the Acts. These Acts are signed by the Governor-General on behalf of our Head
of the State, the Queen.
The other type of law is common law which is applied by the Court for solving the issues.
Common law in Australia is based on the British Common law. This law is developed by the
Court on the base of precedents.
It must be noted that, statutory law always prevail common law. In other words, if any act
was passed by the parliament which contradicts the common law then in such case common law

Law 5
will not be valid and Courts are bound to follow the Act passed by the parliament. Judges are not
allowed to adopt any precedent for making the decision which is against the statutory law.
However, Judges has power to interpret the statutory law and such interpretation can be used as
precedent (Law teacher, n.d.).
Legal system of Australia adopts various principles, which help the public and society to
maintain their trust in legal system. These principles are stated below:
 Fairness- Court made the decisions of the basis of set of rules, established for this
purpose.
 Transparency- general public has right to see and understood the actions of legal system.
Court and tribunals are open for general public, unless issue is of such nature which must
be decided behind the closed doors.
 Equality before law- every person is treated in similar and equal way, no matter who they
are. This can be understood through example, for every person whether such person is
richer or poor Court applies the similar law if similar crime was committed by the person.
Therefore, every person has right to access the law in equal terms. In other words, law is
applicable on each person in equal manner. No person prevail the law (DlsWeb, n.d.).
Part C
Commercial Bank of Australia v Amadio:
Issue:
Whether Commercial Bank has right to execute the contract against Amadio, and whether
Amadio was bound by the contract?

Law 6
Rule:
Capacity to provide genuine consent includes complete understanding of the contract, and
genuine consent is considered as the most important element of the contract. It must be noted
that if genuine consent of the person is not present in the contract then contract is not legally
binding on the parties. There are various factors through which genuine consent can be affected:
 Mistake
 Duress
 Unconscionable conduct
Unconscionable conduct considered as those transactions which are occurred between
dominant and weaker parties, and this type of conduct is prohibited in both equity and common
law.
Numbers of protections are offered by ACL to the consumer, and one of these protections
stated that contract signed by person under unconscionable conduct is not enforceable
(Australian Contract Law, n.d.).
Prohibition related to unconscionable conduct is stated under Section 20-22 of the ACL.
While deciding any case, Court first considers provisions of section 21 and 22. If conduct of the
person is not fall under section 21 then section 20 is considered by the Court for determining the
issue under the principles of common law (Competition and Consumer Act, 2010).
Section 20 of the Act prohibits the corporation to engage in unconscionable conduct within the
meaning of unwritten law. For the purpose of preventing overlap, section 20 is not applicable on
those matters which fall under section 21. It must be noted that this section is identical in the
terms of section 51AA of the Trade Practices Act.

Law 7
Section 21 of the ACL prohibits the unconscionable conduct in relation to the supply of
goods and services from the person. This section is not intended to be limited by unwritten law,
and relevant factors are considered by the Court such as circumstances in which contract is
created between the parties.
Range of the factors for the purpose of determining the unconscionable conduct is stated
under section 22 of the ACL.
In other words, for determining whether there has been unconscionable conduct under section 21
of the Act, court will consider the factor stated under section 22 of the ACL. These factors
include:
 Bargaining power of the parties.
 Whether person who signs the contract is able to understand the terms of the contract.
 Whether dominant party use any pressure or undue influence against the weaker party.
 Whether supplier fails to disclose any factors which contrary the interest of the consumer.
 Extent up to which parties to the contract acted in good faith.
This can be understood through case law Lloyds Bank Ltd v Harrison.
In this case, court stated that, those banks which were taken the guarantee
from the surety against anything which have been conducted between the
bank and the principle debtor then in such case bank was bound to inform
the surety about any matter which was not naturally expected by the person.
In other words, obligation related to disclosure arises only in that case when
something unusual thing take place between the bank and the principle
debtor.

Law 8
Application:
In this case, both Mr. and Mrs. Amadio sign the contract of surety with the Commercial
Bank of Australia, for the purpose of guaranteeing the debts of the company of their son. Their
son uses some misrepresentations for the purpose of inducing them to sign the mortgage deed.
At the time of signing the Contract Mr. Amadio was 76 years old and he had very little
understanding of reading English language. On the other hand, Mrs. Amadio was 71 years old,
but she had no skills of English language. Therefore, they were not able to understand this
document clearly, and Mr. Amadio was under representation at the time of signing the contract
that liability was limited up to $50000 only, but in actually they were liable for the complete
amount. This belief was induced by the misrepresentation made by Vincenzo's.
It is clear from the above facts that bank was under the obligation to reveal true facts to Mr. and
Mrs. Amadio about the true position of the accounts of the company, and bank does not
compiled with this obligation. Therefore, bank was also liable for the misrepresentation made by
Vincenzo's.
Bank also fails to provide expert advice to Mr. and Mrs. Amadio, which also make them
liable towards the Amadio. Therefore, this transaction was considered as unconscionable, and
equity provides relief for the same.
Conclusion:
In this case, court stated that Amadio was induced by the representation made by his son
and believes that liability was up to $50000 only and lasts up to six months. Judge stated that Mr.
and Mrs. Amadio would not sign the contract if they were aware about the true facts. Therefore,
they were not liable under the contract.

Law 9
Part D
Issue:
Whether Betty has any option to terminate the contract between Betty and Ram?
Law:
There are some cases in which contract are terminated by the parties because of the
supervening event which is not in the control of the parties, and this doctrine is known as the
doctrine of frustration. This can be understood through case law Taylor v Caldwell (1863) 3 B &
S 826.
This case was considered as the fundamental case under the contract law. This case was
very important, as Murray stated that “frustration developed to alleviate harshness of absolute
obligation rule". In other words, Court discharges the parties from all liabilities under some
particular circumstances.
In this case, music hall was hired by the plaintiff for the purpose of conducting four grand
concerts. Great expense was incurred by the plaintiff for arranging these concerts. However,
music hall was destroyed just a week before the first concert because of the accidental fire.
Plaintiff file suit against the defendant for breach of the contract for failing to provide the hall,
and claim damages from the defendant.
For the purpose of considering the full effect of this case, court determines two cases for
understanding the working of the doctrine and these cases are Krell v Henry and Herne Bay
Steamboat Co v Hutton.

Law 10
In Krell, flat was hired by the defendant from the plaintiff. Later, plaintiff sue defendant
for non-payment of the rent. In this case, Court stated that contract was frustrated because of the
non-occurrence of the event. In this foundation of the contract was Coronation Procession. On
the other hand, in another case of Herne bay, defendant rented boat from plaintiff for the purpose
of taking the passengers to watch Naval Review which was organized as part of the Edward VII
events day. In this contract is not frustrated because neither the review not the fleet was
considered as the foundation of the contract.
Therefore, in case Taylor vs. Caldwell plaintiff was not succeeded in his claims because
it is not possible for defendant to perform the contract.
Application of doctrine- this doctrine is applied in very specific situations. Generally, it
applied when particular event prevent the performance of the contract, and situation is
completely different from the anticipation of the parties. In case, event is already anticipated by
the parties or event is mentioned in the terms of the contract then doctrine of frustration is not
applicable.
Effect of doctrine- under common law if contract is not performed because of frustration
then contract is automatically terminated. The loss incurred to parties because of the termination
of the contract is lie with the party where it falls. However, this rule has some exceptions also.
Statutory modification- it means, that there are number of cases harshness caused because
of the common law rule is avoided by the Court (Australian Contract law, n.d.).
Application:

Law 11
In this case, doctrine of frustration applied as Ram failed to perform the contract because
of the heavy rains and all the coal mines owned by ram was flooded. This event is not in the
hands of the either party. Heavy rains and flood can be considered as the supervening event
which is not in the control of the parties.
In the present case, contract between Ram and Betty was discharged by frustration and
Betty can terminate the contract under the doctrine of frustration.
Conclusion:
Contract can be terminated under the doctrine of frustration.
References:
Australian Contract Law. Commercial Bank of Australia v Amadio (1983) 151 CLR 447.
Retrieved on 1st September 2017 from:
https://www.australiancontractlaw.com/cases/amadio.html.
Australian Contract law. Discharge by Frustration. Retrieved on 1st September 2017 from:
https://www.australiancontractlaw.com/law/termination-frustration.html.
Australian Contract Law. Unconscionable Conduct. Retrieved on 1st September 2017 from:
https://www.australiancontractlaw.com/law/unconscionable.html.
Commercial Bank of Australia v Amadio (1983) 151 CLR 447.
Competition And Consumer Act 2010 - Schedule 2 The Australian Consumer Law- Section 20.
Competition And Consumer Act 2010 - Schedule 2 The Australian Consumer Law- Section 21.
Competition And Consumer Act 2010 - Schedule 2 The Australian Consumer Law- Section 22.
DlsWeb. Overview of the Australian Legal System. Retrieved on 1st September 2017 from:
https://www.dlsweb.rmit.edu.au/toolbox/legal/OFFICE/T00/T00_A/t0_lesy.html.
Herne Bay Steamboat Co v Hutton [1903] 2 KB 683.

Law 12
Hot Topic 60, (2007). Australian Legal System. Retrieved on 1st September 2017 from:
http://www.utas.edu.au/__data/assets/pdf_file/0017/334232/aust_leg_syst_601.pdf.
Krell v Henry [1903] 2 KB 740.
Law Teacher. Distinguishing Features Of The Australian Legal System. Retrieved on 1st
September 2017 from:
https://www.lawteacher.net/free-law-essays/constitutional-law/distinguishing-features-of-
the-australian-legal-system-constitutional-law-essay.php.
Law Teacher. Inquisitorial and Adversarial System of Law. Retrieved on 1st September 2017
from: https://www.lawteacher.net/free-law-essays/constitutional-law/inquisitorial-and-
adversarial-system-of-law-constitutional-law-essay.php.
Taylor v Caldwell (1863) 3 B & S 826.
Trade Practices Act- Section 51AA.