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Place Of Performance

When a legal dispute involves parties or property located in more than one jurisdiction, and the substantiate laws of those jurisdiction differ, the courts may applythe lex loci contractus or the law where the contract was made to decide the dispute.  In Am. Mfrs. Mut. Ins. Co. v. Sherborn Meadows, LLC, 2008 U.S. Dist. LEXIS 103909 (D. Mass. Dec. 22, 2008), the court held that the nature of a contract obligation and its interpretation commonly are governed by the law of the place where the contract is made.

In Pinnacle Pizza Co. v. Little Caesar Enters., 560 F. Supp. 2d 786 (D.S.D. 2008), the court found that under the South Dakota law, a contract must be construed in accordance with the law of the place where made unless it is shown that it was the intention of the parties to be bound by the law of some other place. The test of the place of a contract is the place where the last act is done by either of the parties which is necessary to complete the contract and give it validity.

If the place of performance is different from the place where contract is made, it is presumed that the former is intended to apply.  In London Assurance v. Companhia De Moagens, 167 U.S. 149 (U.S. 1897), it was stated that the general principle in relation to contract made in one place to be executed in another is well-settled.  They are to be governed by the law of the place of performance, and if the interest allowed by the laws of the place of performance is higher than that permitted at the place of the contract, the parties may stipulate for the higher interest.

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