Eastern Rail. Co. (1862), 12 C. B. N. S. 63, at p. 72; 31 L. J. C. P. 286, at p. 289, Erle, C. J. (See Hope v. Hope, post, p. 104.)

"The right to land in Chili must, no doubt, be determined by the lex loci, but a contract entered into between three English gentlemen, two of them domiciled and residing in England, and the third residing in Chili, but not having acquired a foreign domicile, must, I think, be governed and construed by the rules of English law."-Cood v. Cood (1863), 33 Beav. 314, at p. 322; 33 L. J. Ch. 273, at p. 278, Sir John Romilly, M. R.

"In determining a question between contracting parties, recourse must first be had to the language of the contract itself, and (force, fraud and mistake apart) the true construction of the language of the contract (lex contractus) is the touchstone of legal right. It often happens, however, that disputes arise, not as to the terms of the contract, but as to their application to unforeseen questions, which arise incidentally or accidentally in the course of performance, and which the contract does not answer in terms, yet which are within the sphere of the relation established thereby, and cannot be decided as between strangers. In such cases it is necessary to consider by what general law the parties intended that the transaction should be governed, or rather to what general law it is just to presume that they have submitted themselves in the matter. A familiar illustration of this will be found in the rule, that the lawful usages of a market are as much part of a contract entered into there, which does not expressly exclude them, as if they were set down at large. The binding force of such usages does not depend so much upon the knowledge of the parties as upon implied acquiescence: for whoso goes to Rome must do as those at Rome do. So in the absence of express provision or special usage, the general law itself, in many points of view only a more extended usage, supplies the gaps which the parties have left, and in doing so sometimes modifies the construction of general words in the contract. For instance, a common carrier, while on the one hand he is bound by stringent rules for the protection of his customers, on the other is allowed certain exemptions from liability, even upon an express contract if it do not exclude such exemptions. Thus by the common law of England a person who expressly contracts absolutely to do a thing, not naturally impossible, is not excused for non-performance because of being prevented by the act of God, or the King's enemies (Paradine v. Jane (1648), Aleyn, 26); and yet, in consideration of the risks to which common carriers are exposed, such

prevention is in their case an implied exception. And in the case of ordinary bailees entrusted with the custody of goods, whether by express contract or not, the exceptions of overwhelming force (vis major), and accident without fault (casus fortuitus), are implied. . . In the diversity and conflict of laws which ought to prevail, is a question that has called forth an amazing amount of ingenuity, and many differences of opinion. It is, however, generally agreed that the law of the place where the contract is made, is prima facie that which the parties intended, or ought to be presumed, to have adopted as the footing upon which they dealt, and that such law ought therefore to prevail in the absence of circumstances indicating a different intention, as for instance, that the contract is to be entirely performed elsewhere, or that the subject-matter is immoveable property situate in another country, and so forth; which latter though sometimes treated as distinct rules, appear more properly to be classed as exceptions to the more general one, by reason of the circumstances indicating an intention to be bound by a law different from that of the place where the contract is made; which intention is inferred from the subject-matter and from the surrounding circumstances, so far as they are relevant to construe and determine the character of the Lloyd v. Guibert (1865), L. R. 1 Q. B. 115, at pp. 120, 121, 122, 123; 35 L. J. Q. B. 74, at pp. 75, 76, Willes, J., delivering the judgment of the Court (Erle, C. J., Pollock, C. B., Martin, B., Willes and Keating, JJ., and Pigott, B.). "Considering the authorities which have been brought to my notice, particularly that of Lloyd v. Guibert [(1865), L. R. 1 Q. B. 115, at p. 122; 35 L. J. Q. B. 74], it seems to me that the rule is that the law of the place where the contract was made is ordinarily to be adopted in construing it."-Chamberlain v. Napier (1880), 15 Ch. D. 614, at p. 630; 49 L. J. Ch. 628, at p. 633, Hall, V.-C. "Adopting the well-known rule of law as acted upon in Lloyd Guibert [(1865), L. R. 1 Q. B. 115, at p. 122; 35 L. J. Q. B. 74], the law of the place where the contract is made is primâ facie that which the parties intended or ought to be presumed to have adopted as the footing upon which they dealt."-Chartered Mercantile Bank of India v. Netherlands India Steam Navigation Co. (1882), 9 Q. B. D. P. 122; 51 L. J. Q. B. 393, at p. 395, Pollock, B.

contract.">

V.

118, at

"What is to be the law by which a contract, or any part of it, is to be governed or applied, must be always a matter of construction of the contract itself as read by the light of the subject-matter

6

and of the surrounding circumstances. Certain presumptions or rules in this respect have been laid down by juridical writers of different countries and accepted by the Courts, based upon common sense, upon business convenience, and upon the comity of nations; but these are only presumptions or primâ facie rules that are capable of being displaced, wherever the clear intention of the parties can be gathered from the document itself and from the nature of the transaction. The broad rule is, that the law of a country where a contract is made presumably governs the nature, the obligation, and the interpretation of it, unless the contrary appears to be the express intention of the parties. (This broad rule is cited by Stirling, J., in Actien Gesellschaft für Cartonnagen Industrie v. Temler and Seeman (1901), 18 R. P. C. 4, at p. 15.) 'The general rule,' says Lord Mansfield, established ex comitate et jure gentium is that the place where the contract is made, and not where the action is brought, is to be considered in expounding and enforcing the contract. But this rule admits of an exception where the parties, at the time of making the contract, had a view to a different kingdom': Robinson v. Bland [(1760), 1 W. Bl. 256, at p. 258; see Peninsular and Oriental Steam Navigation Co. v. Shand (1865), 3 Moo. P. C. (N. S.) 272, at pp. 290, 291]. This principle was explained by the Exchequer Chamber in the case of Lloyd v. Guibert [(1865), L. R. 1 Q. B. 115, at p. 122; 35 L. J. Q. B. 74] as follows: It is, however, generally agreed that the law of the place where the contract is made is primâ facie that which the parties intended, or ought to be presumed to have adopted as the footing upon which they dealt, and that such law ought therefore to prevail in the absence of circumstances indicating a different intention, as for instance, that the contract is to be entirely performed elsewhere, or that the subject-matter is immoveable property situate in another country, and so forth; which latter, though sometimes treated as distinct rules, appear more properly to be classed as exceptions to the more general one, by reason of the circumstances indicating an intention to be bound by a law different from that of the place where the contract is made; which intention is inferred from the subjectmatter and from the surrounding circumstances so far as they are relevant to construe and determine the character of the contract.' It is obvious, however, that the subject-matter of each contract must be looked at as well as the residence of the contracting parties, or the place where the contract is made. The place of

.

another.

performance is necessarily in many cases the place where the obligations of the contract will have to be enforced, and hence, as well as for other reasons, has been introduced another canon of construction, to the effect that the law of the place of fulfilment of a contract determines its obligations. But this maxim, as well as the former, must, of course, give way to any inference that can legitimately be drawn from the character of the contract and the nature of the transaction. In most cases, no doubt, where a contract has to be wholly performed abroad, the reasonable presumption may be that it is intended to be a foreign contract determined by foreign law; but this primâ facie view is in its turn capable of being rebutted by the expressed or implied intention of the parties. as deduced from other circumstances. Again, it may be that the contract is partly to be performed in one place and partly in In such a case, the only certain guide is to be found in applying sound ideas of business, convenience, and sense to the language of the contract itself, with a view to discovering from it the true intention of the parties. Even in respect of any performance that is to take place abroad, the parties may still have desired that their liabilities and obligations shall be governed by English law; or it may be that they have intended to incorporate the foreign law to regulate the method and manner of performance abroad, without altering any of the incidents which attach to the contract according to English law. Stereotyped rules laid down by juridical writers cannot, therefore, be accepted as infallible canons of interpretation in these days, when commercial transactions have altered in character and increased in complexity; and there can be no hard and fast rule by which to construe the multiform commercial agreements with which in modern times we have to deal.”—Jacobs v. Crédit Lyonnais (1884), 12 Q. B. D. 589, at pp. 599-601; 53 L. J. Q. B. 156, at p. 158, Bowen, L. J., delivering the judgment of Brett, M. R., and himself.

"It is

generally agreed that the law of the place where the contract is made is prima facie that which the parties intended or ought to be presumed to have adopted as the footing upon which they dealt, and that such law ought therefore to prevail in the absence of circumstances indicating a different intention. Numerous instances of the exceptions are to be found in the books. A different -that is, an intention to be bound by some other law than

intention

the law of the place where the contract is made-may be inferred from the subject-matter of the contract and from the surrounding

B.

H

circumstances, so far as they are relevant to determine the character of the contract: see the judgment of Mr. Justice Willes in Lloyd v. Guibert [(1865), L. R. 1 Q. B. 115, at pp. 122, 123; 35 L. J. Q. B. 74]. The terms and stipulations found in the contract itself are matters of importance to be taken into consideration as to the true inference to be drawn."-In re Missouri Steamship Co. (1889), 42 Ch. D. 321, at p. 326, Chitty, J.

"The principles on which this case has to be decided have been familiar to the Courts at any rate since the time of Lord Mansfield, who, in the case of Robinson v. Bland [(1760), 2 Burr. 1077; 1 W. Bl. 256], expounded those principles of law, and they have been clearly stated since in many cases, among others in the wellknown case of Lloyd v. Guibert [(1865), L. R. 1 Q. B. 115; 35 L. J. Q. B. 74], where the learned judge [Willes, J.] who delivered the judgment of the Exchequer Chamber said: 'It is, however, generally agreed that the law of the place where the contract is made is primâ facie that which the parties intended, or ought to be presumed to have adopted as the footing upon which they dealt, and that such law ought therefore to prevail in the absence of circumstances indicating a different intention, as, for instance,' and he goes on to enumerate instances from which the Courts have gleaned a different intention. That view of the law was fully adopted in the case of Jacobs v. Crédit Lyonnais [(1884), 12 Q. B. D. 589; 53 L. J. Q. B. 156] in this Court."-Ibid., at p. 340; 58 L. J. Ch. 721, at p. 724, Fry, L. J.

"If a contract is made in a country, to be executed in that country, unless there appears something to the contrary you take it that the parties must have intended that that contract, as to its construction and as to its effect and the mode of carrying it out (which really are the result of its construction), is to be construed according to the law of the country where it was made. But the business sense of all business men has come to this conclusion, that if a contract is made in one country, to be carried out between the parties in another country, either in whole or in part, unless there appears something to the contrary, it is to be concluded that the parties must have intended that it should be carried out according to the law of that other country. Otherwise a very strange state of things would arise, for it is hardly conceivable that persons should enter into a contract to be carried out in a country contrary to the laws of that country. That is not to be taken to be the meaning of the parties, unless they take very particular care to