The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 48
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250 FEDERAL REPORTER
In the absence of an element with a different situs, the law of the
place where the contract was entered into will determine its validity.
The Droposition is usually more broadly stated. It is sometimes said
that if the agreement is a valid contract where made it is valid every-
where, and that if void where made it is void everywhere. These prop-
ositions are true only upon the assumption that the law of the place
adopts as a part of itself, with reference to an agreement some ele-
ments of which are not directly referable to the place of the making,
the law of the place of performance, the law of the place where the
consideration passed, and the law of the place of other elements en-
tering into the contract. It is certainly well recognized by the author-
ities that a contract may, within the jurisdiction within which it is
made, be held valid by reason of the fact that it is to be performed
elsewhere, when it would not be held valid if to be performed within
the state in which it is made. It is also the case that the law of a
state may hold a contract made within that state void on account of
the character of the consideration, as measured by the law of another
state, when, if the consideration had been referable to the law of the
state in which the contract was made, it would have been sustained as
With reference to the law of usury, it may be said to be fairly well
settled that if the contract has no elements other than the place of the
making, of the consideration, and of the performance, the place of
the first and second being the same, and the place of the third differ-
ent, the contract would be sustained, if the interest rate is legal with-
in either state. In the important case of Andrews v. Pond, 13 Pet. 65,
10 L. Ed. 61, where the contract was held void, this principle is rec-
ognized. A careful study of the many cases in which questions of
the same general character as those under consideration have been
discussed leads to the conclusion that the place of the making of the
contract is an important element; but that the law of the place of
making is, in no sense, conclusive of the legality or invalidity of the
That both parties are within the jurisdiction when the contract is
made presents another element that is not unimportant. When one
of them is within the state and another is in another, an element not
less important appears. Especially is the fact of importance if the
parties are citizens of the states in which they may respectively be at
the time the contract is made. Residence and citizenship of the payor,
for instance, when coupled with other elements, as the place of land
mortgaged to secure the debt, and the place where the money is to be
used, may be of controlling force.
The place where the negotiations are carried on may be of more
importance than the place where the agreement already reached has
its consummation in formal execution and delivery of instruments.
The place of the negotiations, coupled with other circumstances, may
give rise to the presumption that the law of that place is the law with
reference to which the contract is made, and the law by which its le-
gality is to be determined.
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/63/: accessed October 20, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.