HISTORY
Until
the middle of the 19th century, the courts applied the lex
loci contractus or the law of the place where the contract was made, to
decide whether the give contact was valid. The apparent advantage of this
approach was that the rule was easy to apply with certain and predictable
outcomes. Unfortunately, it was also open to abuse, e.g. the place could be
selected fraudulently to validate an
otherwise invalid contract; it might lead to application of laws with no real
connection with the transaction itself, say, because the parties signed the
agreement while on a holiday; or it might have been difficult to decide where
the contract was made, e.g. because it was negotiated and signed on a railway
journey through several states.
To
avoid these difficulties, some courts proposed applying the lex
loci solutionis or the law of the place of performance of the contract.
This produced difficulties in cases where the contract required each party to
perform its obligations in a different country, or where the place of
performance was dictated by later circumstances.
These
shortcomings probably informed Lord
Wright’s position in Mount Albert Borough Council v Australasian
Temperance and General Assurance Society[1]
that:
“English
law in deciding these matters, has refused to treat as conclusive rigid or
arbitrary criteria such as lex loci
celebrationis or lex loci solutionis and has treated the matter as depending
on the intention of the parties to be ascertained in each case as a
consideration of the terms of the contract, the situation of the parties and
generally on all the surrounding facts”
Oyekolade, O (2018). Conflict of Law: Proper Law of Contract. Afribary.com: Retrieved March 02, 2021, from https://afribary.com/works/conflict-of-law-proper-law-of-contract
Oyediran, Oyekolade. "Conflict of Law: Proper Law of Contract" Afribary.com. Afribary.com, 04 Jul. 2018, https://afribary.com/works/conflict-of-law-proper-law-of-contract . Accessed 02 Mar. 2021.
Oyediran, Oyekolade. "Conflict of Law: Proper Law of Contract". Afribary.com, Afribary.com, 04 Jul. 2018. Web. 02 Mar. 2021. < https://afribary.com/works/conflict-of-law-proper-law-of-contract >.
Oyediran, Oyekolade. "Conflict of Law: Proper Law of Contract" Afribary.com (2018). Accessed March 02, 2021. https://afribary.com/works/conflict-of-law-proper-law-of-contract