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Home > Journals > Michigan Law Review > MLR > Volume 23 > Issue 6 (1925)

 

Abstract

With the constant growth of the United States as a commercial nation, it has been inevitable that state lines should figure in business transactions to an ever diminishing extent. Business relations, keeping pace with the rapid development of modem means of transportation, have increasingly assumed an interstate aspect. With this extension of commercial dealings, the question of the legal rights of the parties so engaged has frequently arisen. Diversity of local rules of law has led to much litigation and disagreement. Differences in local rules might be overcome through the services of competent commercial lawyers, and contracts might then be entered into which would bind both parties and be capable of enforcement in the courts of the states involved in the relationship of the parties. But when to this situation is added the diverse and uncertain rules of Conflict of Laws applied by the local courts, the difficulties which confront those engaged in interstate commerce become more apparent. For example if A of Illinois· desires to contract with W, a Texas married woman, he can easily find out that the contract would be void if executed in Texas, and valid if made in Illinois. But having entered into the contract in Illinois he still must run the gauntlet of the various Conflict of Laws rules. These are the facts of Union Trust Co. v. Grosman, 245 U. S. 412, where the federal court of the district of Texas, admitting that the law of the place of making rather than the law of the domicile of the defendant or the law of the place of performance controlled the validity of the contract, still held it unenforceable as against the policy of Texas law. On certiorari on the ground that the conflict of Laws rule of comity or hospitality toward causes of action acquired under the laws of a sister state required their enforcement, it was held by the Supreme Court that the lower court was not required to enforce foreign causes of action against the policy of Texas law. Thus still another uncertainty, that of inconsistency with the policy of the law of the place of domicile is added to those stated above.

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