Place Of Contracting
law of the
forum decides as a preliminary question by the law of which state
arising concerning the formation of a contract are to be determined,
state is, in the Restatement of this Subject, called the "place of
Comment d. Determination
of "place of
contracting." Under its Conflict of Laws rules, in determining
the place of contracting, the forum ascertains the place in which,
under the general law of Contracts, the principal event necessary to
make a contract occurs. The forum at this stage of the investigation
does not seek to ascertain whether there is a contract. It examines the
facts of the transaction in question only so far as is necessary to
determine the place of the principal event, if any, which, under the
general law of Contracts, would result in a contract. Then, and not
until then, does the forum refer to the law of such state to ascertain
if, under that law, there is a contract, although of course there
normally will be a contract unless the local law of Contracts of the
state to which reference is thus made differs from the general law of
Contracts as understood at the forum.
§ 323. Informal Unilateral Contract
the case of an informal unilateral contract, the place of contracting
is where the event takes place which makes the promise binding.
§ 325. Informal Bilateral Contract
the case of an informal bilateral contract, the place of contracting is
where the second promise is made in consideration of the first promise.
§ 326. Acceptance Sent From One State To Another
an offer for a bilateral contract is made in one state and an
acceptance is sent from another state to the first state in an
authorized manner the place of contracting is as follows:
if the acceptance is sent by an agent of the acceptor, the place of
contracting is the state where the agent delivers it;
if the acceptance is sent by any other means, the place of contracting
is the state from which the acceptance is sent.
Comment e. When offer requires receipt of
acceptance by offeror.
This rule does not apply to an offer
which requires for acceptance actual communication of consent to the
offeror. In that case, the place of contracting is where the acceptance
is received in accordance with the offer.
§ 332. Law Governing Validity Of Contract
law of the place of contracting determines the validity and effect of a
promise with respect to
capacity to make the contract;
the necessary form, if any, in which the promise must be made;
the mutual assent or consideration, if any, required to make a promise
any other requirements for making a promise binding;
fraud, illegality, or any other circumstances which make a promise void
except as stated in § 358, the nature and extent of the duty for
the performance of which a party becomes bound;
the time when and the place where the promise is by its terms to be
the absolute or conditional character of the promise.
Capacity To Contract
law of the
place of contracting determines the capacity to enter into a contract.
Authorization In One State To Act In
agreement between two or more persons constitutes an authorization by
person that another may perform an act on his behalf is determined by
of the place where the agreement is made.
law of the
place of contracting determines whether a promise is void, or voidable
fraud, duress, illegality or mistake or other legal or equitable
Transfer And Assignment Of Contractual Rights
under a contract is capable of being transferred by the owner, is
the law of the place of contracting.
Formalities Of Assignment
necessary to make an effective assignment of a right under an informal
are determined by the law of the place of assignment.
§ 358. Law Governing Performance
duty for the performance of which a party to a contract is bound will
be discharged by compliance with the law of the place of performance of
the promise with respect to:
the manner of performance;
the time and locality of performance;
the person or persons by whom or to whom performance shall be made or
the sufficiency of performance;
excuse for non-performance.
Comment b. Practical line separating
question of obligation from question of performance. While the
law of the place of performance is applicable to determine the manner
and sufficiency and conditions under which performance is to be made,
it is not applicable to the point where the substantial obligation of
the parties is materially altered. As stated in § 332, Comment c, there is no logical line which
separates questions of the obligation of the contract, which is
determined by the law of the place of contracting, from questions of
performance, determined by the law of the place of performance. There
is, however, a practical line which is drawn in every case by the
particular circumstances thereof. When the application of the law of
the place of contracting would extend to the determination of the
minute details of the manner, method, time and sufficiency of
performance so that it would be an unreasonable regulation of acts in
the place of performance, the law of the place of contracting will
cease to control and the law of the place of performance will be
applied. On the other hand, when the application of the law of the
place of performance would extend to a regulation of the substance of
the obligation to which the parties purported to bind themselves so
that it would unreasonably determine the effect of an agreement made in
the place of contracting, the law of the place of performance will give
way to the law of the place of contracting.
§ 361. What Amounts To
law of the
place of performance determines the details of the manner of performing
duty imposed by the contract.
Person To Whom Performance Rendered
law of the
place of performance of a contract determines the person to whom
shall be rendered.