The purpose of the Act was to remove any apparent inconsistency between local (colonial) and British (imperial) legislation.

This had the effect of clarifying and strengthening the position of colonial legislatures, while at the same time restating their ultimate subordination to the Westminster Parliament.

This had been a particular problem for the government in South Australia, where Justice Benjamin Boothby had struck down local statutes on numerous occasions in the colony's Supreme Court.

Accordingly, the imperial Parliament passed the Statute of Westminster, which repealed the application of the Colonial Laws Validity Act 1865 to the dominions (i.e., Australia, Canada, the Irish Free State, New Zealand, Newfoundland, and the Union of South Africa).

Instead, facing grave financial difficulties as a result of the Great Depression, Newfoundland gave up responsible government in 1934.