Restatement on Contracts

 

§ 311. Place Of Contracting

The law of the forum decides as a preliminary question by the law of which state questions arising concerning the formation of a contract are to be determined, and this state is, in the Restatement of this Subject, called the "place of contracting."

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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

In 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

In 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

When 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:
(a) if the acceptance is sent by an agent of the acceptor, the place of contracting is the state where the agent delivers it;
(b) if the acceptance is sent by any other means, the place of contracting is the state from which the acceptance is sent.
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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

The law of the place of contracting determines the validity and effect of a promise with respect to
(a) capacity to make the contract;
(b) the necessary form, if any, in which the promise must be made;
(c) the mutual assent or consideration, if any, required to make a promise binding;
(d) any other requirements for making a promise binding;
(e) fraud, illegality, or any other circumstances which make a promise void or voidable;
(f) except as stated in § 358, the nature and extent of the duty for the performance of which a party becomes bound;
(g) the time when and the place where the promise is by its terms to be performed;
(h) the absolute or conditional character of the promise.

§ 333. Capacity To Contract

The law of the place of contracting determines the capacity to enter into a contract.

 

§ 343. Authorization In One State To Act In Another

Whether an agreement between two or more persons constitutes an authorization by one person that another may perform an act on his behalf is determined by the law of the place where the agreement is made.


§ 347. Defenses


The law of the place of contracting determines whether a promise is void, or voidable for fraud, duress, illegality or mistake or other legal or equitable defense.


§ 348. Transfer And Assignment Of Contractual Rights

Whether a right under a contract is capable of being transferred by the owner, is determined by the law of the place of contracting.

 

§ 352. Formalities Of Assignment

The formalities necessary to make an effective assignment of a right under an informal contract are determined by the law of the place of assignment.


§ 358. Law Governing Performance

The 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:
(a) the manner of performance;
(b) the time and locality of performance;
(c) the person or persons by whom or to whom performance shall be made or rendered;
(d) the sufficiency of performance;
(e) 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 Performance

The law of the place of performance determines the details of the manner of performing the duty imposed by the contract.

 

§ 366. Person To Whom Performance Rendered

The law of the place of performance of a contract determines the person to whom performance shall be rendered.