Conflict of Laws

Aejay V. Barias
PCU- College of Law
CHAPTER V
CONTRACT
Law on contract; lex loci contractus.
Article 17. The forms and solemnities of
contracts, wills, and other public instruments
shall be governed by the laws of the country in
which they are executed.
 The doctrine of lex loci contractus states that, as a
general rule, the law of the place where a contract is
made or entered into governs with respect to its
nature and ^validity, obligation and interpretation.
This is particularly so, if the place of making and the
place of performance are the same. The rule has
been said to be applicable even though the place
where the contract was made is different from the
place where it is to be performed
 The exception to the lex loci contractus is the
case of a contract affecting land or title thereto,
where the test is the lex rei sitae, the law of the
place where the property is located, which
governs the forms, solemnities and validity of
such contract, including the capacity of the
person to take the land, and which obtains in
the Philippines
Changes in lex loci contractus to most significant
relationship
It has been held, however, that the term lex loci
contractus has undergone changes from the time that
substantive questions of law were decided by the law of
the place of the making while procedural questions
were decided by the law of the forum.12 Sections 187
and 188 of the U.S. Restatement of Law, Conflict of Laws,
2d., seem to reflect the changes which the traditional
doctrine of lex loci contractus has undergone, in favor of
the
Choice of law by the parties in a contract
The parties to a contract may select the law by which it is to be
governed. In such a case, the foreign law is adopted as a "system" to
regulate relations of the parties, including questions of their capacity
to enter into the contract, the formalities to be served by them,
matters of performance and so forth. Instead of adopting the entire
mass of the foreign law, the parties may just agree that specific
provisions of a foreign statutes hall be deemed incorporated into their
contract "as a set of terms." By such reference to the provisions of the
foreign law, the contract does not become a foreign contract to be
governed by the foreign law. The said law does not operate as a statute
but as a set of contractual terms deemed written in the contract, such
that if the foreign law so incorporated in the contract provides for
greater benefits than those in the contract, theformer shall govern.
 Instead of adopting the entire mass of the
foreign law, the parties may just agree that
specific provisions of a foreign statute shall be
deemed incorporated into their contract "as a
set of terms”
Exceptions to law chosen by the parties
1. Where the foreign lawn chosen is contrary to peremptory
provisions dealing with matters impressed with public
interest, the chosen law cannot be applied.

2. Where the relationship of the contracting parties affects

public interest in the country of one of the parties, or the
substantial contacts arising therefrom point to the law of
another country as applicable law, such law will be applied,
notwithstanding the fact that the parties have agreed that a
specific foreign law as the applicable law.
Where there is no agreement as to choice of law
Where the parties have not stipulated in their contract which
law should be made applicable in case of breach thereof, the
courts of the forum apply the different rules determinative of
the applicable law. One of such rules is the application of the
law where the contract was executed, or the lex loci celebrationis
rule.
However, in cases involving claims of Filipino workers on
account of injury or death during employment or in the course
of services in a vessel owned by the foreign employer, the law of
registry of the vessel, if favorable to the worker, is applied
Where there is neither agreement nor treaty

The plaintiff makes the choice of the forum, or the

court where the action or complaint is filed. If
plaintiff chooses the Philippines to file the action,
whether his choice will be sustained by the court
depends upon a number of considerations, such as
his cause of action and the law upon which it is
based, the venue and jurisdiction of the court, and
private interests of the litigants.
Place of where contract is entered into or place
of performance

The law of the country where the contract is

to be performed generally governs the liability
for breach of contract by the obligor to perform
his part of the obligation.
Air transportation under the Warsaw
Convention

Where there is a treaty or convention to which the

Philippines is a signatory on where an action coming within
the purview of such treaty or convention may be filed, the
plaintiff must follow the provisions thereof on the matter.
An example of such convention is the Warsaw Convention
which applies to all international transportation of persons,
baggage or goods performed by an aircraft gratuitously or
for hire.
When liability under Warsaw Convention does
not apply

The Warsaw Convention sets a limit of liability.

However, such limit of liabilities does not apply
where the airline is at fault.
Illustrations of liability under a contract
An airline ticket is a contract of transportation. Where the
passenger is a resident and national of the forum and the
ticket is issued in said place, the law of the place where the
airline ticket was issued governs. Thus, Philippine laws apply
where the ticket was issued in the Philippine to its citizens
and residents in the country. With respect to overbooking,
preventing a passenger from boarding even though he has a
confirmed ticket and has complied with the airline's check-in
and reconfirmation procedure, the airline may be held liable
for damages, where it acted in bad faith
CHAPTER VI
WILLS AND SUCCESSIONS
Extrinsic validity of wills
Article 17 of the Civil Code provides that the "forms and
solemnities of x x x wills xxx shall be governed by the laws
of the country in which they are executed." If the will is
executed in the Philippines or before the diplomatic or
consular officials of the Republic of the Philippines in a
foreign country, the extrinsic requirements of a will must
comply with in accordance with Philippine laws,
particularly Articles 804 to 819 of the Civil Code, otherwise
they may not be allowed probate.
 When a Filipino is in a foreign country, he is
authorized to make a will in any of the forms
established by the law of the country in which he
may be, and such will may be probated in the
Philippines. However, two or more persons cannot
make a will jointly, or in the same instrument, either
for their reciprocal benefit or for the benefit of a
third person. A joint will executed by Filipinos in a
foreign country shall not be valid in the Philippines,
even though authorized by the laws of the country
where they may have been executed
 The will of an alien who is abroad produces
effect in the Philippines if made with the
formalities prescribed by the law of the place in
which he resides, or according to the formalities
observed in his country, or in conformity with
those which the Civil Code prescribes. The
formality is governed by the law of his domicile or
the place in which he resides; or in accordance with
formalities prescribed by law of his country; or in
conformity with the requirements of our Civil Code
 A will made in the Philippines by a citizen or
subject of another country, which is executed in
accordance with the law of the country of
which he is a citizen or subject, and which
might be proved and allowed by the law of his
own country, shall have the same effect as if
executed according to the laws of the
Philippines
Probate of wills
The probate of a will refers to the authentication
of a will in a probate proceeding in court concerning
the capacity of the testator and the compliance with
those requisites or solemnities which the law
prescribes for its validity. Probate of a will is
mandatory and, unless probated in court, the right of
a person to dispose of his property by will is
rendered nugatory
 In order that a will may take effect, it has to be
probated, legalized or allowed in the proper
testamentary proceeding Once probated, the
principle of res judicata applies, with respect to its
extrinsic validity, which means that the testator was
of sound and disposing mind at the time when he
executed the will and was not acting under duress,
menace, fraud, or undue influence; that the will was
signed by him in the presence of the required
number of witnesses, and that the will is genuine
and is not a forgery.
 A will may be probated outside the
Philippines under Rule 77 of the Rules of
Court
 A foreign will which as been executed and
probated in a foreign country in accordance with its
law may be filed and reprobated in the Philippines
with respect to property of the decedent in the
country, although it does not accord with the
requirements for wills executed in the Philippines.
 When a decedent has properties in the Philippines
and abroad, the administration of his estate will
require the appointment of a domiciliary or principal
administrator and an ancillary administrator with
respect to properties abroad. The reason is that an
administrator in one state or country has no power
over property in another state or country. Nor will the
probate court in one country have the power in
another country, in connection with the administration
of the estate of the decedent. The estate will have to be
separately settled, in each state or country
The evidence necessary for the reprobate or allowance of will in the
country, which has been probated outside the Philippines, are:

1. The due execution of the will in accordance with the foreign law;
2. The testator has his domicile in the foreign country and not in the
Philippines;
3. The will has been admitted to probate in such country;
4. The fact that the foreign tribunal is a probate court; and
5. The laws of a foreign country on probate and allowance of wills.17

All the above requisites must be proved in order that the probate of a
will abroad will be allowed in the country.
Law on successional rights; intrinsic validity.
The national law of the person whose succession,
testate or intestate, is under consideration governs
the following:
(1) the order of succession;
(2) amounts of successional rights;
(3) intrinsic validity of testamentary dispositions; and
(4) capacity to succeed
 The extrinsic or formal validity of wills is governed by
the law of the place where they are executed. The
intrinsic validity of a will is governed by the national law
of the decedent. The intrinsic validity of wills under the
Civil Code is governed by Articles 798 to 403 thereof,
which governs wills executed by citizens of the
Philippines wherever they may have been executed, as
his national law follows him in his travels in accordance
with the second paragraph of Article 16 of the Civil Code.
END