Approaches to choice of law: contracts

Question 1

Traditional approach: formation, interpretation, and validity

Answer 1

The place of contracting governs issues of contract formation, interpretation, and validity.

The place of contracting is where the last act necessary to create a contractual right occurred—so generally, it will be the place of acceptance.

Question 2

Traditional approach: performance

Answer 2

The law of the place of performance governs issues related to the performance of the contract.

Question 3

Second Restatement approach

Answer 3

In addition to considering the default guiding principles, a court must account for:

(1) The place of contracting, negotiation, and performance;
(2) The place where the subject matter of the contract is located; and
(3) The location of the parties domiciles, residences, places of incorporation, or places of business.

If the location of negotiation and performance are the same, the law of that state presumptively applies.