lex loci contractus

In the conflict of laws, the lex loci contractus is the Latin term for "law of the place where the contract is made".

The lex loci contractus is one of the possible choice of law rules applied to cases testing the validity of a contract.

Article 11 covers the situation where two persons physically present in the same state make a contract, and both parties have capacity under the lex loci contractus.

A contract may be deemed valid in lex loci contractus, but if it is a revenue law of that state it will not be enforced in the forum state.

Until the middle of the 19th century, the courts applied the lex loci contractus or the law of the place where the contract was made to decide whether the given contract was valid.

This could be decided by reference to the lex domicilii, lex patriae or habitual residence of the parties, or for policy reasons, by reference to the lex loci contractus.

Adopting a rule such as the lex loci contractus, i.e. apply the law of the place where the contract was made, might actually select a law having no other connection with the substance of the bargain made by the parties.

In fact, the law of State X is the lex loci contractus and the most appropriate law since everything relevant to the potential tortious liability occurred in that state which has the greatest interest in maintaining consumer confidence in the motor trade.