The recognition of native title common-law raise the possibility that grants made by states and territories since 1975 over land were native title subsisted were inconsistent with the Racial Discrimination Act 1975 (Cth). The recognition also raised the possibility that grants made by the Commonwealth over land were the title subsisted were invalid, if they constituted an acquisition in contravention of the constitutional requirement to give just terms compensation. The Commonwealth had the power to deal with such matters under its power to make laws with respect to any race for whom it is deemed necessary to make special laws. This power also supported legislation to recognise and protect the title, to deal with the consequences are possibly validity of titles issued by the various governments in Australia, and to establish a process reassuring that grants and other actions by governments did not impair or extinguish native title in a discriminatory way.
The object of legislation which was a enacted as a result of these developments came into effect on 1 January 1994, just after 18 months have passed since the first major caselaw decision. The stated objects were to provide the recognition and protection of title; and to establish ways in which future dealings effective native title may proceed and to set standards for those dealings; and to establish a mechanism for determining claims to native title; and to provide for, or permit, the validation pass acts, and intermediate period acts, invalidated because of the existence of this type of title. Section 10 of legislation provides that the title is recognised, and protected according to the legislation. Therefore, where claims brought a determination that they have title which exists over land, it must satisfy the conditions of recognition contained in the act. These include meeting the definition under the act and the requirements for a determination under section 225. The impact of this legislation was enormous, because a number of pastoral leases which had been granted by the Commonwealth were called into question. Aboriginal people began to agitate to have these leases claimed back by the Commonwealth and given to them as part of their native title claims. This caused a serious dispute between farmers tenanted on this land and aboriginal people.