- Title
- Reforming Pacific contract law
- Creator
- Ellinghaus, Fred; Wright, Ted
- Relation
- http://www.adb.org/publications/reforming-pacific-contract-law
- Publisher
- Asian Development Bank
- Resource Type
- report
- Date
- 2009
- Description
- We were engaged as ADB consultants to a Private Sector Development Initiative project on contract law reform in the Pacific Islands. Phase 1 of the project required us to investigate and report on whether contract law reform would assist private sector development in Pacific countries. We completed site visits to the Solomon Islands, Vanuatu, Tonga and Papua New Guinea in the period July-November 2008. This report describes our findings. The general law of contract in these countries is not codified. In most jurisdictions there is some legislation dealing with specific contracts, mostly adopted from the UK, and often now outdated. But the general rules of formation, performance and enforcement of contracts are to be found only in the reported decisions of courts, going back for centuries, predominantly English but also from Australia, NZ and other common law jurisdictions. The volume of these reports is massive and constantly increasing. Case law is often minutely detailed, abstract and complex. The form in which the rules are stated varies from judgment to judgment, and no single formulation can ever be taken as authoritative or final. In our view, and that of most people whom we consulted on our visits, this system of law does not serve the needs of the Pacific Islands well. The inaccessibility of case law, the time and cost associated with applying it, the difficulty of keeping up to date, and the remoteness of English law from Pacific conditions, were universally cited as significant problems by business people and lawyers alike. These difficulties are compounded by the fact that access to skilled legal advice in these countries is limited. Contract law is little used, poorly understood, and often mistrusted by local businesspeople. As a result there is a large informal economy, and correspondingly little participation by locals in the formal economy. Few written contracts are made, often leading to inefficient risk management, problems of non-compliance and unnecessary disputation, and spectacularly inefficient outcomes. These factors have a self-evident limiting effect on economic development. We have concluded that a written contract law in the form of a Pacific Contract Code of 50-75 Articles, stating existing rules of common law and equity in the form of broad principles, would have many benefits for these jurisdictions. Such a Code would make contract law more accessible and efficient, and serve as an educational tool, encouraging local people to use contracts and to participate in the formal economy. It would improve legal support for local business, and help to produce a better investment environment. It could provide a uniform law throughout the region that is fully compatible with the law of the region's trading partners. The proposal to draft such a Pacific Contract Code was strongly supported by nearly everyone we spoke to, including the Chief Justices of all four jurisdictions.
- Subject
- contract law; reform; Pacific region
- Identifier
- http://hdl.handle.net/1959.13/1058679
- Identifier
- uon:16454
- Language
- eng
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