Traditional Approach to Torts and Contracts

Question 1

History of Choice of Law - authors and dates

1. Commentaries on Conflict of Laws
2. First Restatement
3. Governmental Interest Analysis
4. Second Restatement

Answer 1

1. Commentaries on Conflict of Laws
   
   1. Judge Joseph Story
   2. 1834
2. First Restatement
   
   1. Joseph Beale
   2. 1934
3. Governmental Interest Analysis
   
   1. Brainerd Currie
   2. 1963
4. Second Restatement
   
   1. Willis Reese
   2. 1971

Question 2

Place of the Wrong - Territorial Theory Principles

1. Sovereignty
2. Comity

Answer 2

1. Sovereignty - Every nation has exclusive sovereignty within its own borders
   
   1. No state or nation can bind persons or property outside its own territory
2. Comity – enforcement of one country’s laws in another depends on the latter’s consent.

Question 3

Torts - First Restatement

1. Main Rule
   
   1. Depecage
   2. Liability for Servant Torts
   3. Vested Rights and Transitory Causes of Action
2. Last Event Test
   
   1. Purpose
   2. Exceptions
3. Benefits and Shortcomings

Answer 3

1. First Restatement (1934) – the existence of a cause of action for tort depends upon the law of the place of wrong.
   
   1. Depecage – the application of different states’ laws to different issues in the same case.
      
      1. Generally disfavored at common law.
   2. §386 – Liability to Servant for Tort of Fellow Servant – The law of the place of wrong determines whether a master is liable in tort to a servant for a wrong caused by a fellow employee.
   3. Vested Rights and Transitory Causes of Action - there can be recovery in one state for injuries sustained in another state if the injuries are actionable under the laws of the state in which they were received.
2. Last Event Test in Torts Field – the place of wrong is the state where the last event necessary to make the actor liable for an alleged tort takes place (i.e. where the harm from the negligent act occurred).
   
   1. Resolves issues where negligence occurs in one jurisdiction but the harm occurs in another.
   2. Exceptions –
      
      1. Standard of Care - If law of place of wrong depends on the application of a standard of care, the standard should come from the place of the actor’s conduct.
      2. Authorized Conduct in Home State - A person required, prohibited, or privileged to act under the law of the place of acting should not be held liable for the consequences in another state.
3. Benefits and Shortcomings of Place of Wrong
   
   1. Shortcomings –
      
      1. Dispute between citizens of the same state may need to be decided by another jurisdiction’s laws.
   2. Benefits –
      
      1. Discourages forum shopping (ie uniformity)
      2. Protects reasonable expectations of parties.
      3. Creates predictability

Question 4

Contracts - First Restatement

1. Validity of Contracts
   
   1. Unilateral vs. Bilateral Contracts
2. Performance of Contracts
3. Place of Contracting
   
   1. Who Decides?
   2. Method of Deciding?

Answer 4

1. Validity of Contract - §332–33 - the law of the place of contracting determines the validity and effect the contract, and capacity to contract.
   
   1. Informal Unilateral Contracts – the place of contracting is the place where the event takes place that makes the promise binding.
   2. Informal Bilateral Contracts – the place of contracting is the place where the second promise is made in consideration of the first promise.
2. Law Governing Performance – §358 the duty of performance of a contract will be discharged by compliance with the law of the place of performance.
   
   1. Note - the above restatement provisions basically mean its possible that the validity of a contract can be governed by one state’s laws while performance can be governed by another state’s laws.
3. Place of Contracting –
   
   1. Who Decides? - the law of the forum decides as a preliminary question the place of contracting.
   2. Method of Deciding – where the principal event necessary to make the contract occurs (usually acceptance).
      
      1. By Mail – place from which acceptance is mailed.
      2. By Telegraph – where the message of acceptance is received by the telegraph co.
      3. By Telephone – where the acceptor speaks his acceptance.

Question 5

Real Property - First Restatement

1. Main Rule

Answer 5

1. The Restatement Situs Rule - most issues concerning real property are governed by the law of the property’s situs (i.e., where it is located), including:
   
   1. validity of conveyances
   2. disposition of land under probate
   3. effect of marriage on interests in land.

Question 6

Movable Property - First Restatement

1. Main Rule
2. Exceptions
3. Definition of Domicile
   
   1. Changing Domicile
   2. Purpose of Domicile

Answer 6

1. Main Rule - situs also applies to moveable property, subject to several exceptions.
2. Exceptions - moveable property in relation to the following issues are governed by the owner’s domicile:
   
   1. Inheritance of moveable Property
   2. Testamentary Succession to moveable property
   3. Marital Property Rights to moveable property
   4. Validity of marriage/divorce
3. Domicile – the place where a person is deemed to “live.”
   
   1. Changing Domicile – (1) Physical presence and (2) the intention to remain are necessary.
      
      1. Cannot have more than one domicile at a time.
      2. Can’t usually establish a domicile by compulsion
         
         1. Exceptions – prisoners.
   2. Purpose –
      
      1. domicile creates a concrete bright line rule.
      2. domicile is usually the place to which the decedent already has the strongest connection.

Question 7

Escape Devices - Characterization

Answer 7

1. Characterization – the process of determining whether a dispute deals with torts or contracts to determine which choice of law rules apply.
   
   1. Issues –
      
      1. A case may involve both contract and tort claims.
      2. Sometimes different bodies of law use similar concepts that mean different things.
      3. Overly broad in application causing conflicting results.

Question 8

Escape Devices - Substance vs. Procedure

1. General Rule
2. Method of Determination
   
   1. Examples
      
      1. Statute of Limitations Rules
      2. Statutory Damages Rule

Answer 8

1. General Rule - the forum doesn’t have to apply the procedural law of the foreign state, only looks to substantive law.
2. Method of Determination - under the First Restatement, the forum determines whether a law is substantive or procedural.
3. Examples
   
   1. Statute of Limitations - forum always gets to apply its own statute of limitations.
      
      1. Effect - a forum could theoritically allow a case that would be barred by the SOL of the state where the cause of action arose.
      2. Built-in SOL Exception - if foreign SOL is built into provision creating cause of action, foreign SOL should apply.
      3. Borrowing Statute Exception - some state statues require court to look to SOL of foreign jurisdiction, regardless of procedure or substance.
   2. Limitations on Damages - forum gets to apply its own damages statutes.

Question 9

Renvoi - General Principles

1. Definition
2. Internal vs. Whole Law
   
   1. Rejection
   2. Acceptance
   3. Remission
   4. Transmission
3. Issue

Answer 9

1. Renvoi – considering a foreign state’s choice of law rules in applying the foreign state’s laws.
2. Interval vs. Whole Law
   
   1. Internal law – law that would be applied by a foreign jurisdiction, without reference to that state’s choice of laws rules.
   2. Whole law – law that would be applied by a foreign jurisdiction, including the foreign jurisdiction’s choice of law rules.
      
      1. Rejection – if forum refuses to consider choice of law rules of state to which it refers.
      2. Acceptance – if forum follows choice of law rules of state to which it refers.
      3. Remission – if the renvoi is accepted and the state whose choice of law rules are examined refers the case back to the law of the forum state.
      4. Transmission – if renvoi is accepted and the state whose choice of law rules are examined refers the case to a third state.
3. Issue –If all states accept renvoi, no case could ever be decided because each states’ laws would simply refer back to the other in an endless cycle.

Question 10

Renvoi - First Restatement

Answer 10

1. Restatement Rule on Renvoi – the choice of law rules of the forum are applied.
2. Exceptions -
   
   1. Realty – all questions of title to land are decided in accordance with the law of the state where the land is, including the conflict of laws rules of that state.
   2. Divorce Validity – all questions concerning the validity of a decree of divorce are decided in accordance with the law of the domicile of the parties, including the conflict of laws rules of that state.

Question 11

Public Policy - First Restatement

1. General Rule
2. Public Policy Defined
3. Effect

Answer 11

1. Definition - A forum may refuse to hear a case based on a cause of action that violates the clear public policy of the forum.
2. Violation of Public Policy – offends the forum’s sense of justice or menace to the public welfare
3. Effect – allows court to dismiss case without prejudice
   
   1. Not designed to allow forum to default to forum law