Difference between revisions of "Contracts/Governing law"
(Adapted and imported text from Corpus Juris, The American Law Book Co., New York, NY (1917))
Revision as of 14:23, August 1, 2020
- 1 General Rules
- 1.1 Place of performance
- 1.2 Neither place of contract nor place of performance controlling.
- 1.3 Performance in several states.
- 1.4 Interstate commerce.
- 1.5 Place of enforcement.
- 1.6 Domicile of parties.
- 1.7 Express provision in contract.
- 1.8 Implied provision in contract.
- 1.9 Comity basis of all rules.
- 2 Fact of Agreement
- 3 Capacity of Parties
- 4 Form and Execution
- 5 Legality
- 6 Agreements Relating to Realty
- 7 Agreements Relating to Personalty
- 8 Defenses
- 9 Presumptions
- 10 Remedies
- 11 Conflict of Laws as to Time
- 12 References
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"
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