Scottish Court of Session Decisions

It appears to me that in all its qualities and circumstances this is a Scotch contract. That one of the contracting parties is a Frenchman is of no consequence. The party who had to perform it was a Scotchman whose place of business is in Scotland. It has an indissoluble connection with another contract which was also Scotch, and but for which this second would never have come into existence. The first related to the building of ships in the defender's yards in Greenock, and the second stipulated that two per cent, commission was to be ascertained and paid to the present pursuer upon the price of the vessels. Scott was not to be found anywhere except in Greenock. It was there he was domiciled and resided and carried on his business. No place could be contemplated as the place of this contract except Greenock.

A great deal of misunderstanding has been created by the way in which many authors on foreign law have written upon this subject. The locus of a contract according to them appears to be the place where it is reduced to writing and signed, whereas what is really meant is locality as ascertained from the nature of the contract itself, and what is to be done under it when it is to be executed. The Civil law is similar to what I have just stated—“A party is to be held as contracting in that place where he undertakes to perform the contract;” that is, the place of the contract is the place of its performance.

Indeed, it seems to me that this case will not admit of serious argument. The two parties happened to be in Paris at the time of signing. That was a mere accident; at anyrate it was not an incident of the contract. Of course the idea of a Scotch contract requiring a French stamp to make it admissible is out of the question, and I think the judgment of the Lord Ordinary should be affirmed.

Lord Deas—This contract was objected to as the case was first presented to us, not merely to the extent of its not being evidence, but it was said it was null and void, and that the law of the place where it was made must be the law for determining that question. That plea was supported by a plausible argument, and it made no matter for that purpose whether the contract were Scotch or French. The plausibility was further supported by conflicting opinions of judges and jurists upon the points which were cited to us. I was rather disposed to think that we might have an inquiry before answer, to ascertain how far the pursuer's averments of the nullity of the contract were correct.

But the moment it was found necessary to go beyond that and to say that this was a French contract, the plea of the defenders entirely failed. This is clearly a Scotch contract; and that being so an inquiry would be useless.

Lord Ardmillan—I do not think it is necessary to go further here than to say that this is a Scotch contract.

There is, I think, some looseness of language in many of the authorities upon the branch of international law which was argued before us. The lex loci contractus is in many instances interpreted to be the place where the contract was written, but that is more accurately termed the lex loci actus. The lex loci contractus is more truly the law of the place where the contract is intended to be fulfilled.

Lord Mure—I have come to the same conclusion. If this letter, which constitutes the contract, had been an undertaking to pay standing by itself, I should have had some hesitation— looking to Erskine and the other authorities—in holding this to be a Scotch contract. But having regard to the previous contract, and to the fact that the one before us was executed on the same day with that and is referred to as being so signed, I have no difficulty in holding this to be a Scotch contract. That being so, I think the contention of the defender fails.

Lord President—I forgot to advert to a passage in Erskine (iii. 2, 40) which lays down a very important doctrine, and one that is frequently given effect to regarding the solemnities of deeds. A deed may be good and valid here if signed in a foreign country according to our statutory forms or according to the form of the country where it is written, but it does not follow if the second course is followed that it is a foreign deed. It may be a Scotch deed or a Scotch contract, and the two cases of the Master of Salton and Muquet La Pine which are quoted by Erskine are merely cases where effect was allowed to be given to deeds as if made according to Scotch law because they happened to have been executed in a foreign country. This doctrine of law, as quoted in Erskine, was given effect to in the case of Purvis' Trustees, March 23, 1861, 23 D. 823.

Lord Deas I ought to add that I come to the same conclusion in this case upon the footing that there is no reference to the previous contract.