SECTION IX - Legal Transactions In General

Author:E. J. Cohn
Profession:Sir
Pages:16
 
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  1. It is usual in German legal terminology to refer to the legal system governing a legal transaction as the Wirkungsstatut or lex causle, while the law of the place where the transaction has been entered into is referred to as the Ortsrecht or lex loci actus.

    EXAMPLE: A, a French, and B, a German, make a contract which they both gign at Brussels. They agree that the contract should be subject to French law. French law in this case is the lex causte and Belgian law the lex loci actus.

  2. It is a fundamental rule of German private international law that any legal transaction is valid if it is made in the form of the lex loci actus, see article 11 (1), second sentence. Article 11 (1), first sentence, points out that the form of a legal transaction is governed by the lex causce. The real meaning of this section is therefore that the parties have the option of adopting the form either of the lex causae or that of the lex loci actus. The transaction is valid in either case.

    EXAMPLE: In the preceding example the contract is valid if it complies with the rules as to form of either French or Belgian law.

    This rule is frequently referred to as that of the permissive character of the rule of lex loci actus. It thus differs markedly from the rule of English law according to which contracts must be made in accordance with the local form (see Dicey, Rules 159 (2)). It applies generally to all legal transactions, not only to contracts, but also e.g. to wills, etc. As the rule is intended to assist parties in finding the proper form to which their contract is subjected, the rule of the lex loci actus is applied without any regard to a renvoi or transmission which might be contained in the private international law of the lex loci actus. There are a few important cases in which the lex loci actus is mandatory (not permissive), i.e., for marriages (see section 13 (3)), for bills of exchange (article 92 Wechselgesetsz of 21

    June, 1933) and for cheques. In the last two cases, however, transactions made by a German are binding in favour of another German, if they comply with the formal requirements of German law.

  3. It is a question of classification what is and what is not a requirement of form. This question must be answered in accordance with the German rules as to classification and not in accordance with any rules of a foreign legal system.

    EXAMPLES: The rules of section 4 of the Sale of Goods Act and of section 4 of the Statute of Frauds are considered as...

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