Page:Australian Competition and Consumer Commission v Valve Corporation (No 3).pdf/32

 video game content, and (ii) leaves consumers free to enter contracts that disclaim all guarantees for online services or software.

86 The question raised by the ACCC is whether the SSA clause involving a choice of Washington State law "purports to substitute" or "has the effect of substituting" Washington State law for the provisions of Division 1 of Part 3-2 (Chapter 3) of the Australian Consumer Law. If s 67(b) is read literally then it may be satisfied. A provision of the SSA has substituted Washington State law for the law of Division 1 which would otherwise have applied.

87 Valve submitted that s 67(b) was concerned only with circumstances where the proper law of the contract is a law of some part of Australia in the sense of the law with the closest and most real connection. Senior counsel for Valve submitted that s 67(b) was "dealing with simply some terms of some system of law that is to be substituted for the provisions of this division … So the parties could [not provide that] 'The proper law of this contract is otherwise Australia but, in respect of consumer protection [some other law]…'" (ts 164).

88 The difficulty with this submission by Valve is that it requires s 67(b) to be read as though it were conditioned upon the proper law of the contract being Australian law. Section 67(b) would need to be read, on Valve's submission, as if the following words in italics were included when the section refers to the provisions being substituted: "(i) the provisions of the law of a country other than Australia where the proper law would include Division 1; (ii) the provisions of the law of a State or a Territory where the proper law would include Division 1". There is no warrant for such a large implication for three reasons. The first reason is that (as I explain below) the criterion of operation of Division 1 is no longer the proper law of the contract. The second reason is that the purpose of s 67(b) is to form part of a scheme together with s 67(a); it would defeat that scheme to read down s 67(b) in the manner that Valve submitted. The third reason is that such an implication would contrast sharply with s 67(a) where that condition was expressly included.

89 I conclude, with one assumption, that the inclusion of a Washington State choice of law clause purported to substitute Washington State law for all or any of the provisions of Division 1. The effect of s 67(b) is that, as it says, "the provisions of this Division [1] apply in relation to the supply under the contract despite that term": see also Laminex (Aust) Ltd v Coe Manufacturing Co [1999] NSWCA 370 [32] (Meagher JA; Cole AJA agreeing). The assumption underlying this conclusion, however, is that the Division is not otherwise limited