20.1 ‘Contracting out’ refers to an agreement between owners and users of copyright material that some or all of the statutory exceptions to copyright are not to apply—so that, for example, the user will remunerate the copyright owner for uses that would otherwise be covered by an unremunerated exception; or the user agrees not to use copyright material in ways that would constitute fair use or fair dealing.

20.2 Contracting out raises fundamental questions about the objectives of copyright law, the nature of copyright owners’ exclusive rights and exceptions, and the respective roles of the Copyright Act, contract, and competition and consumer law and policy.

20.3 This chapter considers whether the Copyright Act should limit the extent to which parties may effectively contract out of existing, and recommended new, exceptions to copyright.[1]

20.4 The ALRC recommends that the Copyright Act should be amended to provide that contractual terms restricting or preventing the doing of any act which would otherwise be permitted by the libraries and archives exceptions are unenforceable.

20.5 The Copyright Act should not provide any statutory limitations on contracting out of the new fair use exception. However, if the fair use exception is not enacted, limitations on contracting out should apply to the new fair dealing exception.

20.6 The primary reason for these recommendations is to ensure that certain public interests protected by some copyright exceptions are not prejudiced by private arrangements, promoting fair access to content.[2] However, broader limitations on contracting out—for example, extending to all exceptions, or to all fair uses—would not be practical or beneficial. Generally, removing freedom to contract risks reducing the flexibility of the copyright regime, and the scope to develop new business models for distributing copyright materials.