Difference between revisions of "Contracts/Governing law"

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(Adapted and imported text from Corpus Juris, The American Law Book Co., New York, NY (1917))
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Revision as of 14:23, August 1, 2020

Table of Contents
Contracts Outline
Introduction and Definitions
Contract formation
Intention to Bind
Formal requisites
Mailbox rule
Mirror image rule
Invitation to deal
Firm offer
Collateral contract
Defenses against formation
Lack of capacity
Undue influence
Illusory promise
Statute of frauds
Non est factum
Contract interpretation
Governing law
Construction and Operation
Parol evidence rule
Contract of adhesion
Integration clause
Contra proferentem
Excuses for non-performance
Frustration of purpose
Unclean hands
Accord and satisfaction
Rights of third parties
Privity of contract
Third-party beneficiary
Performance or Breach
Necessity of performance
Sufficiency of performance
Anticipatory repudiation
Exclusion clause
Efficient breach
Fundamental breach
Termination and rescission
Abrogation and rescission
Subsequent contract
Specific performance
Liquidated damages
Punitive damages
Quasi-contractual obligations
Promissory estoppel
Quantum meruit
Actions in General
Parties to Action
Questions of Law and Fact
Trial and Judgment

General Rules

U 19) A. General Bules.9 A contract is governed ss to its intrinsic validity and effect. by the w wi th reference to which the parti es i nten ded , or fairly · may be presumed to have intended, to oontraet/0 the real place of the · contract being a matter of mutual intention, except in except ional ,.ireumstances evincing a purpose ,in making the contract to commit a fraud on the law.11 This law governs not only as to the execution, authentication , and construction of the contract, but also as to the legal obligations arising from it, and as to what is to be deemed a performance, satisfaction, or discharge.12 The intention of the parties may be either expressed or implied from their acts and conduct' at the time of making the contract.18 Par ties to a contract may contract with reference to the laws of any state or country, if they have a substantial connection with the subject matter.14 Place of contract." The act of the parties in entering into a contract at a particular place, in the absence of anything shown to the contrary, suffi ciently indicates their intention to contract with reference to the laws of that place; hence the rule, as it is usually stated, that a contract as to its validity and interpretation is governed by the law of the place where it is made—the lex loci con tractus,16 or, more accurately, that contracts to be governed as to their nature, validity, and in terpretation by the law of the place where they irere made, unless the contracting parties clearly appear to have had some other place in view.17 The presumption recognized by these statements, that the proper law of the contract is the law of the country where the contract is made, applies with special force when the contract is to be performed wholly in the country where it is made, or may be performed anywhere; but it may apply to a contract partly or even wholly to be performed in an other country.18

Place of performance

of the parties,20 although it has been said that, "to show that the parties did not intend the place of performance to be the place of the contract, when void at the place of performance, it must clearly appear that they intended to be governed by the law of the place where . . . [the contract] was made."21

Neither place of contract nor place of performance controlling.

Neither the place where the con tract is made nor the place at which it is to be per formed is conclusive as to the law by which the parties intended the contract to be governed,22 but both are merely important indicia of such fact.23

Performance in several states.

While in numerous cases an entire contract to be performed partly in the state where made and partly in another state has been held to be governed by the law of the place of making,21 and there are other decisions to the effect that each portion is to be governed by the laws of the state in which that portion is performed,26 the better rule would seem to be that the presumed intention of the parties, gathered from the attending circumstances, is to be taken as controlling.2"

Interstate commerce.

Place of enforcement.

Domicile of parties.

Express provision in contract.

Where the parties have expressly provided that the contract shall be governed by the law of a particular country, this intention will as a rule be carried out by the courts,3' and a party is bound by his choice.32 "Parties may substitute the laws of another place or country, than that where the contract is entered into, both in relation to the legality and extent of the original obligation, and in relation to the respec tive rights of the parties, for a breach or violation of its terms."33 This is part of the jus gentium, and is enforced ex comitate, when the enforcement of the contract is sought in the courts of a country governed by a different rule than the local or adopted law of the contract.84

Implied provision in contract.

Comity basis of all rules.

Fact of Agreement

Capacity of Parties

Form and Execution

Revenue stamps.


General Rules.

Agreements Contrary to Good Morals.

Agreements Injurious to the State or Its Citizens

Agreements Contrary to Constitution or Legislation of State.

Agreements Contrary to Public Policy.

Agreements Relating to Realty

Agreements Relating to Personalty

Carriage of Goods.




General Rules

Particular Matters Affecting Remedy

Statutes of Limitations

Exemption Laws

Discharge in Bankruptcy or Insolvency

Protection from Civil Arrest

Whether Instrument Is a Specialty

Whether Remedy Is at Law or in Equity


Conflict of Laws as to Time

In General

Agreement Illegal When Made but Afterward Legalized

Agreement Legal When Made but Afterward Prohibited