*note: no notes for this chapter. Boohoo.
All these are familiar…
Family law: usually won't apply foreign law because family law would apply the law which reflects the values held highly by society of the forum
Vs.
Contract Law: not much attachment to the societies moral mores; reflect business practices

Extrinsic Validity	Intrinsic Validity
Law of the place where the contract was entered	Would depend: Lex loci contractus Lex loci solutionis Lex loic intentionis

LAW OF THE PLACE OF CONTRACTING
-where exactly: law of the place where the last act was executed
-is there anything in the Civil code as to these rules?
ART17, NCC: formalities governed by law of the place of contracting
ART 1319, NCC: when contract was through mail - offer: law of the place where OFFER was made
Why lex loci contractus binding:
*more stable
*easier to determine
Extrinsic Validity: formalities:
1. recognize justified expectations of the parties: at the time the parties entered into a contract, they had in mind that the place where they executed the contract is the law which they intended or expected to apply to their transaction
2. Stability of commercial transactions: no progress if people cannot depend on the promises made by other persons
Intrinsic Valitidy
-nature, content, effects of agreements
1. Lex loci contractus: protect jusitified expectations of the parties + stability of the laws which govern their transactions - whenever there are controversies, you are encouraging uniformity, simplicity, convenience and predictability
2. Lex loci solutionis: law of the place of performance
*Does RP always apply Lex loci contractus (traditional approach)?
-more as an option available, esp. when it is not clear what the parties agreed on
3. Lex loci intentionis
A1306: free to contract as long as...
A1371: intention of the parties paramount
MACMILLAN V. VALDERAMA & SONS
F: Valderama, through agent Splane, entered into a contract for delivery with Macmillan of railroad equipment to the Philippines from Canada, upon acquiring of Valderama of the letter of credit (which was based on the procurement of an import license). Import license not acquired.
-Since no import license issued, Macmillan cancelled the freight engagement and incurred expenses. Sued Valderama for expenses.
-defense: It's not their fault if no import license issued + their agent was not fully authorized to enter contract in their behalf, so contract was perfected in RP (upon their receipt of acceptance of their offer)
H: whatever law would be followed, law of Canada applicable
Law of contracting: Canada
Law of performance: Canada
*Valderama liable: the failure of Import Control Commission can't be a legal excuse
*Ma'am: there's only an apparent conflict because regardless of what law would be applied, law of Canada would govern
What is clear:
Validity of the contract - law of the place of contracting forever! (problem: where is the place of contracting)
Issues related to the performance:
4. validity of the contract
5. Substantial compliance w/ terms of the contract
Lex loci intentionis
-problem: if the parties' intention is unclear
-solution:
NCC: if clear, then apply literal interpretation of the contract;
If unclear, look at the overt acts of the parties, surrounding circumstances (simultaneous and contemporaneous acts)
-if you can't tell based on their actions what the parties intended: presume contract is valid
(you don't go through the process, undergo formalities, unless you don't have any other intention to carry it out)
CHOICE OF FORUM CLAUSE
-identify which court would have jurisdiction over the case
Vs. Choice of law: parties stipulate which laws would apply to their agreement
Campagnie de Commerce vs. Hamburg
-French Company had their goods shipped through German company. The cargo was never delivered, the goods perished and thus were sold and some were dumped into the sea.
-French company sued German company in RP. As defense, German company said England Arbitration Board should have jurisdiction, not RP (in addition to filing of counterclaim).
H: Contractual stipulations cannot oust RP courts of jurisdiction
-plus German defendant assailing the jurisdiction already prayed for affirmative reliefs (counterclaim)
*even if the parties choose a forum, the choice of forum would only be resorted to if the said forum clause is the sole forum and that you cannot go to any other state unless you go to the forum which was stipulated
King Mau vs. Sycip
-Sycip's agent, King Mau, filed for claim for unpaid commission pursuant to agency contract entered in NY for the sale of coconut oil emulsion to foreign companies.
H: Even if the contract was entered, and to be performed in NY, RP courts still had jurisdiction over the case because:
1. Personal action
2. No conflict of law case: issue is enforcing of obligation created from the contract
*ma'am on point that there's no conflict of law case: there's a foreign element so it's a conflicts of law case
-used layman's definition of conflict of law here
-issue of turf: the two cases shows how the court limits the agreement of the parties as to their choice of forum
-yeah sure, the jurisdiction is conferred by law; these choice of forum clauses is more of choice of venue because jurisdiction cannot be subject to agreement of the parties
HSBC vs. Shermann
F: agreement provided that any conflict would be resolved in Singapore but HSBC filed collection suit before RTC (RP)
H: RTC can exercise jurisdiction. Choice of forum clause does not provide for the SOLE forum, to the exclusion of the rest
*but if follow the choice of forum clause, it would appear that the court might not still recognize it even if it places SOLELY, etc.
ARBITRATION CLAUSE
Arbitration clause: an agreement between the parties wherein the parties agree to undergo arbitration proceedings
PUROMINES case
-Arbitration clause provided that the parties should undergo arbitration first but the victim party filed suit in RTC
H: recognize validity of arbitration clause
*why enter into arbitration clause?
For parties to save and resolve cases swiftly
ADHESION CONTRACT
-one wherein dominant party draft the contract
-why still considered voluntary: when the adhering party enters into the contract, he is presumed to have read and understood the terms of the contract and have agreed to be bound by it (there's real consent on the part of the party adhering)
X: Sweet lines case: not valid: no choice, plus passengers usually illiterate (no freedom of choice really)
-in this case, gave additional condition to the company to ensure that the passengers would understand the terms of the contract
Undue advantage to one party (language…)
Pan am world vs. Rapadas
-Rapadas, who did not want to check in his Samsonite briefcase but was compelled to do so in the end. It got lost. Panam wanted to compensate him with only $160k but Rapadas wanted more.
H: Contract of adhesion in here (which provides for limited liability) is valid (but don't give it blind reliance), presume that the passenger, upon contacting w/ airline, was expected to be vigilant…
-but court gave a bigger liability for Panam, treating the luggage as unchecked
*you just accept the terms of the contract, w/o looking at the ticket