CHAPTER 1

I. International law – rules and principles of general application dealing with the conduct of states and
of international organizations and with their relations inter se, as well as with some of their
organizations and with persons, whether natural or juridical. It includes not only questions of right of
persons within the territory and dominion of one nation, by reason of acts, private or public, done
within the dominions of another nation. It is a branch of law that deals with the relationship of states as
well as the relationship of individuals of different states. It has a public character when international
subjects are involved and a private character when individuals, domestic laws. Or local events
intermingle with each other necessitating a determination of the applicable law.

PRIVATE INTERNATIONAL LAW – is that department of national law which arises from the fact
that there are in the world different territorial jurisdiction possessing different laws.

TWO BRANCHES OF INTERNATIONAL LAW

1. Public international law – governs the relationship of states and international entities.
2. Private international law – comprehend laws regulating private interactions across national frontiers.
it deals with conflict of laws among the laws of two or more states and necessitates a determination of
which municipal law applies to a case.

What are the sources of conflict of laws?

• Direct source – constitutions, codifications, special laws, treaties and conventions, judicial
decisions, and international customs.
• Indirect source – natural moral law, and the works of writers

DISTINCTIONS BETWEEN PUBLIC AND PRIVATE INTERNATIONAL LAW

• As to source, public international law is based on internal conventions, international customs,
the general principles of laws recognized by civilized nations, and judicial decisions and the
teachings of the most highly qualified publicists of the various nations.
• Private international law, is based on domestic and municipal laws, which includes the
constitution and statues adopted by individual countries.
• Public international law is the same for all states which is not necessarily the case with private
international law.
• As to subject, public international law has states and international organizations as subjects.
Private international law has individuals and corporations as subjects thereof.

SCOPE OF FUNCTIONS OF CONFLICT OF LAWS

Three-fold functions of Conflict of Laws
(1) To prescribe the conditions under which the court is competent to entertain such a suit;
(2) to determine for each class of cases the particular territorial system of law by reference to which the
rights of the parties must be ascertained.
(3)To specify the circumstances in which a foreign judgment can be recognized asdecisive of the
question in dispute.
Three specific aims of function are:
(1) the determination of which country has jurisdiction;
(2) the applicability to a particular cases either the local or the foreign law;
(3) the determination of force, validly and effectiveness of a foreign judgment

Article 38 of the Statute of the International Court of Justice, “competent proof of the content of
customary international law. These sources consist of:
(a) international conventions, whether general or particular, establishing rules expressly recognized by
the contesting states;
(b) international custom, as evidence of a general practice accepted as law;
(c) the general principles of law recognized by civilized nations;
(d) judicial decisions and the teachings f the most highly qualified publicists of the various nations, as
subsidiary means for the determination of rules of law.

CONFLICT OF LAWS – Is that branch of the municipal law of a state which directs its courts and
administrative agencies, when confronted with a legal problem involving a foreign element, whether or
not they should apply a foreign law or foreign laws.

II. FORUM NON CONVENIENS - simply means that the forum is not convenient. It may be that the
chosen forum, or the place where the suit is filed. It has no substantial connection to the parties or to
the dispute that it becomes very inconvenient to litigate the suit in the chosen venue. It is a concept in
private international law and was devised to combat the “less than honorable” reasons and excuses that
litigants use to secure procedural advantages, annoy and harass defendants, avoid overcrowded
dockets, and select a “friendlier” venue.

Questions: When is dismissal no appropriate?

Dismissal is not appropriate if an adequate and presently available alternative forum does not exist. A
forum in which defendants are amenable to service of process and which permits litigation of the
dispute is generally adequate.
Where is the burden of proof rests:
The defendant bears the burden of establishing that a presently available and adequate alternative
forum exists, and that the balance of private and public interest factors tilts heavily in favor of the
alternative forum. Absent a showing of inadequacy by a plaintiff, “considerations of comity preclude a
court from adversely judging the quality of a foreign justice system.
What is the burden of the plaintiff?
While the plaintiff bears the initial burden of producing evidence of corruption, delay or lack of due
process in the foreign forum, the defendant bears the ultimate burden of persuasion as to the adequacy
of the forum.
What is Parallel Litigation – When parallel litigation arises strictly within the context of a single
jurisdiction, such rules as those on forum shopping, litis pendentia, and res judicata.
FOREIGN ELEMENT – is anything which is not domestic and has a foreign component to it. It can
be a foreigner, a foreign corporation, an incident happening in a foreign country, or a foreign law
chosen by the parties. Without a foreign element, the case is only a domestic problem with no conflicts
dimensions. It is a factual situation that cuts across territorial lines and is affected by the diverse or
variance of laws of two or more states is said to contain a foreign element. The presence of a foreign
element is inevitable since social and economic affairs of individuals and associations are rarely
confined to the geographic limits of their birth or conception.

PHASES IN CONFLICT RESOLUTION

1. jurisdiction – concerns the authority if a court of law to take cognizance of a case.
2. choice of law – refers to the applicable law to the problem.
3. recognition and enforcement – concerns the enforcement of foreign laws and judgments in another
jurisdiction.

NOTE: There phases are separate from each other and defense in one phase is not a defense in other
phase. For example: The doctrines of lex loci celebrationis and lex contractus is not grounds to
question the jurisdiction of the court. The defense of forum non conveniens cannot be used as a defense
to choice of law disputes. Thus, it is important to analyze the real issues in a conflicts problem for the
purpose of utilizing the appropriate approach to a contractual dispute.

Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks
the further question whether the application of a substantive law which will determine the merits of the
case is fair to both parties.
JURISDICTION DEFINED – In general, jurisdiction is the authority of a tribunal to hear and decide
a case. Complete jurisdiction necessarily includes not only the power to hear and determine a cause, but
also the power to enforce any judgment it may render thereon. Ultimately, it is the court of the forum
which decides whether or not jurisdiction, considering the attendant circumstances, is present. For this
purpose, it is usually the law of the forum that furnishes the yardstick for the presence or absence of
jurisdiction.

Kinds of jurisdiction
(1) Jurisdiction over the subject matter – is conferred by law and is defined as the authority of a ourt
to hear and decide cases of the general class to which proceedings in question belong.
(2) Jurisdiction over the person – is the power of the court to render judgment that will be binding on
the parties involved: the plaintiff and the defendant. It is acquired from the moment he institutes the
action by the proper pleading.
(3) Jurisdiction over the res – is the jurisdiction over the particular subject matter in controversy,
regardless of the persons who may be interested thereon. Said jurisdiction may for instance be acquired
by coercive seizure of the property by attachment proceedings.

Lex loci celebrationis – relates to the law of the place of the ceremony or the law of the place where a
contract is made.
Lex contractus - means the law of the place where a contract is executed or to be performed. It
controls the nature, construction, and validity of the contract and it may pertain to the law voluntarily
agreed upon by the parties or the law intended by them either expressly or implicitly.

NOTE: Under the MOST SIGNIFICANT RELATIONSHIP RULE, to ascertain what state law to
apply to a dispute, the court should determine which state has the most substantial connection to the
occurrence and the parties. In a CASE INVOLVING CONTRACT, the court should consider where the
contract was made, was negotiated, was to be performed, and the domicile, place of business, or place
of incorporation of the parties.

NOTE: BEFORE DETERMINING WHICH LAW SHOULD APPLY, the should exist a
CONFLICT OF LAWS situation requiring the application of the conflict of laws rules.

WHAT SHOULD THE COURT OR ADMINISTRATIVE AGENCY DO WHEN

CONFRONTED WITH A CONFLICTS CASE INVOLVING A FOREIGN ELEMENT?
(1) Dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction;
(2) assume jurisdiction over the case and apply the internal law of the forum;
(3) assume jurisdiction over the case and take into account or apply the law of some other State of
States.

When the forum assumes jurisdiction over a case, it may, under proper circumstances:
(1) apply the internal or domestic law (lex fori);
(2) apply the proper foreign law (lex causae)
There are at least 3 instances, when the forum has to apply the internal or domestic law in
adjudicating a conflicts problem set before it. These instances are the following:
(1) when the law of the forum expressly so provides in its conflicts rules:
(2) when the proper foreign law has not been properly pleaded and proved;
(3) when the case involves any of the exceptions to the application of the proper foreign law
(exceptions to comity):
1. when the foreign law, judgment, or contract is contrary to a sound and established public
policy.
2. when the foreign law, judgment, or contract is contrary to almost universally conceded
principles of morality (contra bonus mores)
3. when the foreign law, judgment, or contract involves procedural matters;
4. when the case involves purely fiscal (that is, revenue producing) or administrative matters
5. when the application of a foreign law, judgment, or contract, may work undeniable justice to
the citizens or residents of the forum
6. when the application of a foreign law, judgment, or contract, may work against vital interests
and national security of the state of the forum
7. when the case involves real or personal property situated in the forum.

STEPS IN DETERMINING APPLICABLE LAW

1. Characterization – involves identification of the issue in the problem. It is a process of spotting the
legal issues as presented by the facts of the case. An important step in this process is pinpointing the
branch of law implicated by the problem. After identifying the branch of law, the next step will be
determining whether there is conflicts of law problem by the presence of a foreign element.

2. Connecting factors – Here, an analysis is made with respect to which jurisdiction or fora has the
most connection to the case. The nationality of the parties, the location of the act or event, the terms of
the agreement or contract, and other matters are looked into to determine what legal system between
two or more legal systems is applicable.

CHOICE OF APPLICABLE LAW - Parties to a contract are free to stipulate the applicable law that
will govern their contractual relations. Article 1306 of the Civil Code provides that: the contracting
parties may establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or public policy.

EXTRATERRITORIALITY – Laws are generally territorial in application. The mind of the

lawmaker is limited to the territorial boundaries of his country when he enacts the laws. The questions
of whether a law is territorial or extraterritorial depends on legislative intent. It is within the right of the
legislature of a country to provide that its laws apply outside the territorial boundaries of the state on
matters within the competence of the legislature to legislate upon. Exception: when this intrudes with
the territorial integrity and sovereignty of another country.

What are laws providing extraterritorial application:

Art. 15 – Laws relating to family rights and duties, or to the status, condition and legal capacity of
persons are biding upon citizens of the Philippines, even though living abroad.
Art. 16 – Real property as well as personal property is subject to the law of the country where it is
stipulated. However, intestate and testamentary succession, both with respect to the order of succession
and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is under consideration, whatever may be
the nature of the property and regardless of the country wherein said property may be found.

FORUM NON CONVENIENS – simply means that the forum is not convenient. It may be that the
chosen forum, or the place where the suit is filed. It has no substantial connection to the parties or to
the dispute that it becomes very inconvenient to litigate the suit in the chosen venue. It is a concept in
private international law and was devised to combat the “less than honorable” reasons and excuses that
litigants use to secure procedural advantages, annoy and harass defendants, avoid overcrowded
dockets, and select a “friendlier” venue. Thus, the doctrine of forum non conveniens addresses the
same rationale that the rule against forum shopping does, albeit on a multijurisdictional scale.

WHAT IS THE LEGAL BASIS FOR A COURT TO DECLINE ITS EXERCISE OF

JURISDICTION?
Jurisprudence has applied forum non conveniens as a basis for a court to decline its exercise of
jurisdiction.

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a
litigant’s capacity to vex and secure undue advantages by engaging in forum shopping on an
international scale. It is also grounded on principle of comity and judicial efficiency. Furthermore, it
entails a recognition not only that tribunals elsewhere are better suited to rule on and resolve positioned
to enforce judgments and, ultimately, to dispense justice. Forum non conveniens prevents the
embaassment of an awkward situation where a tribunal is rendered incompetent in the face of the
greater capability – both analytical and practical—of a tribunal in another jurisdiction. Forum non
conveniens must not only be clearly pleaded as a ground for dismissal; it must be pleaded as such at
the earliest possible opportunity. Otherwise, it shall be deemed waived.

Principle of comity – a tribunal’s desistance in exercising jurisdiction on account of forum non

conveniens is a deferential gesture to the tribunals of another sovereign.

Any evaluation of the propriety of contracting parties’ choice of a forum and its incidents must grapple
with two considerations:
(1) the availability and adequacy of recourse to a foreign tribunal;
(2) the question of where, as between the forum court and a foreign court, the balance of interests
inhering in a dispute weighs more heavily.

Enumerates the instances where a court may desist from exercising. (Puyat v. Zabarte)
1. the belief that the matter can be better tried and decided elsewhere, either because the main aspects
of the case transpired in a foreign jurisdiction or the material witnesses have their residences there;
2. the belief that the non-resident plaintiff sought the forum, a practice known as forum shopping,
merely to secure procedural advantages or to convey or harass the defendant;
3. the unwillingness to extend local judicial facilities to non residents or aliens when the docket may
already be overcrowded;
4. the inadequacy of the local judicial machinery for effectuating the right sight to be maintained;
5. the difficulty of ascertaining foreign law.

NOTE: Under the doctrine of forum non conveniens, a court, in conflicts of law cases. May refuse
impositions on its jurisdiction where it is not the most convenient or available forum and the parties are
not precluded from seeking remedies elsewhere. Forum non conveniens must not be clearly pleaded a
such at the earliest possible opportunity. Otherwise, it shall be deemed waived.
NOTE: Forum Non Conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a
means of addressing the problem of parallel litigation. While the rules of forum shopping, litis
pendentia and res judicata are designed to address the problem of parallel litigation within a single
jurisdiction.

CHAPTER 2
CHOICE OF LAW

Section 6 of the U.S Restatement of Laws provides the underlying principles in determining the
law applicable to a conflict case. It states that:

CHOICE OF LAW PRINCIPLES:

(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on
choice of law or local law
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law
include
(a) the needs of the interstate and international systems
(b) the relevant policies of the forum
(c) the relevant policies of other interested states and the relative interests of those states in the
determination of the particular issue
(d) the protection of justified expectations
(e) the basic policies underlying the particular field of law
(f) certainty, predictability and uniformity of result
(e) ease in the determination and application of the law to be applied

1. LOCAL LAW
This principle looks to the statutory directive of the state on choice of law. This is the general rule and
it provides the local law to be the default law that will govern the relationship of the parties to a
dispute.
Example:
Art. 15 – Laws relating to family rights and duties, or to the status, condition and legal capacity of
persons are biding upon citizens of the Philippines, even though living abroad.
Art. 16 – Real property as well as personal property is subject to the law of the country where it is
stipulated. However, intestate and testamentary succession, both with respect to the order of succession
and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is under consideration, whatever may be
the nature of the property and regardless of the country wherein said property may be found. (direct the
application of lex rei sitae of the law of the place where the property is situated for real or personal
properties.

What is the problem of renvoi? A local law requires the forum court to apply a foreign law to the case
in dispute. The foreign law, in turn, directs the application of the laws of the forum court to the case
under consideration. Thus, there is a reference back to the local law of the forum court.

Theory of the doctrine of renvoi – is that the court of the forum, in determining the question before it,
must take into account the whole law of the other jurisdiction, but also its rules as to conflict of laws,
and then apply the law to the actual question which rules of the other jurisdiction prescribe.
2. NEEDS OF THE INTERSTATE AND INTERNATIONAL SYSTEMS – Technological advances
and free trade have brought about numerous international commercial transactions spawning disputes
that cut across national borders. Where we to apply local laws that favor the interest of the forum state,
this would unduly stifle the growth of free trade and discourage prople from trading with their
counterparts in other countries. To prevent this from happening, courts must formulate principles and
reconcile multistate laws with the end in view of encouraging international trade among people.

3. RELEVANT POLICIES OF THE FORUM – The policies of the forum take primordial
consideration when considering the applicable law to a case. Each forum considers certain values to be
highest import to them. For example, the US may take fairness and due process to be cornerstone of
their judicial system. In considering a foreign law, US courts may look at the fundamental fairness of a
law before recognizing its validity. In the Philippines, courts consider protection for labor to be of
highest import. If a case implicates a foreign law which is prejudicial to the interest of labor, courts are
quick to strike down the foreign law in favor of the applicability of local law.

4. RELEVANT POLICIES OF OTHER INTERESTED STATES – Indulges courts to engage in a

governmental interest analysis when two states have conflicting laws and interests. In governmental
interest analysis, courts compare the laws and interests of two states, determine if there is a real
conflict, and if a real conflict exists, apply the law of the state whose interest is more impaired. It is
important to consider the interest of other states since commercial transactions involve people located
in several jurisdictions which have conflicting interests in a transaction.

STEPS IN GOVERNMENTAL ANALYSIS TEST:

1. The court determines whether the relevant law of each of the potentially affected jurisdictions with
regard to the particular issue in question is the same or different;
2. If there is a difference, the court examines each jurisdiction’s interest in the application of its owwn
law under the circumstances of the particular case to determine whether a true conflict exists.
3. If the court finds that there is a true conflict, it carefully evaluates and compares the nature and
strength of the interest of each jurisdiction in the application of its own law “to determine which state’s
interest would be more impaired if its policy were subordinated to the policy of the other state”.

Criticism of Governmental Interest Analysis Approach - A fundamental defect of the governmental

interest analysis approach is that it tends to favor the laws and interests of the forum court. There is
inherent bias for forum courts to favor their own laws or even culture as judges are apt to apply what
they have been taught in law school promoting their state’s values and interests.

5. PROTECTION OF JUSTIFIED EXPECTATIONS – Parties enter into contracts or into legal

relations with the objective of achieving a desired result. Parties would usually specify a particular law
to govern their relationship with each other. They may choose the law of one state over another for tax
and regulatory benefits. When the parties specify a particular law to govern their legal relations, courts
must enforce this choice of law, unless it is contrary to a statutory directive of the forum court, or
contravenes public policy. Parties are free to stipulate the terms and conditions of their agreement,
which terms and conditions become part of the law of the contract.
6. BASIC POLICIES UNDERLYING THE PARTICULAR FIELD OF LAW – This simply means
that the reason and objectives of the laws in question should be given consideration. Hence, courts
should look to the type of law involved.
Choice of law analysis is a three-step process
1. The court must determine whether the conflicting laws are substantive or procedural.
2. The court must then classify the substantive area of law – contract, tort, or property – applicable to
the conflicting laws, as each area of law has its own choice of law provisions.
3. The court must apply the appropriate analytical provisions to the conflict.

7. CERTAINTY, PREDICTABILITY, AND UNIFORMITY OF RESULT – Most judicial systems

favor stability in judicial decisions that is why they have formulated principles lie res judicata and stare
decisis. When the facts of a case falls squarely with the facts of a previously decided case, the doctrine
in the latter case is usually applied to the case in dispute, In the area of torts, courts usually choose
betwee lex loci delicti and most significant relationship. Once they choose between either of the two
they usually follow this approach in deciding future cases; this approach usually becomes the
applicable doctrine in the jurisdiction concerned. The court found stare decisis to be “a valid and
compelling argument for maintaining the doctrine.

8. EASE IN THE DETERMINATION AND APPLICATION OF THE LAW TO BE APPLIED -

Simplicity is always a virtue in determining which law to apply. Of a court is bound by a particular
doctrine by virtue of stare decisis, it is usually simpler for the court to apply the same doctrine in the
future cases. There is no more need to adopt new and more complicated analyses for what only needs to
be done is to apply the law which has been applied before. Some legal approaches also involve more
complicated analyses than other approaches.

OTHER PRINCIPLES AFFECTING CHOICE OF LAW

Foreign laws have to be properly proved before they are admitted into evidence. Failure to prove will
result to the exclusion of the foreign law and a presumption will arise that foreign law is the same as
local law. The effect of a failure to prove foreign law is that local law will become the governing law of
the contract or dispute of the parties. This is the doctrine of processual presumption (Article 17 of
NCC) and it presumes the foreign law to be the same as local law when there is failure to prove
foreign law.

Foreign documents need to be proved before they can admitted into evidence

Section 24, Rule 132 – The record of public documents when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. If the office in which the record is kept is in foreign
country, the certificate may be made by a secretary of the embassy or legation, consul general, consul,
vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authentically by the seal of his office.

Section 25, Rule 132 – Whenever a copy of a document or record is attested fr the purpose of
evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be, The attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court.
Why is there a need that these documents must comply with the requisites provided by the Rules
of Court?
The requirements is not a mere technicality but is intended to justify the giving of full faith and credit
to the genuineness of a document in a foreign country.
What are the exceptions to proof of foreign laws?

1. Presentation of a foreign-licensed attorney who will testify in open court cornering her knowledge of
the law in question.
2. The case of administrative agencies recognizing foreign laws without proof thereof. Administrative
agencies are not bound by technical rules of procedure and may properly recognize the existence of a
foreign law by juridical notice.
3. The lack of objectives to the improper presentation by one party of proof of foreign law, and the
other party does not object, the court may properly consider as proved the foreign law in question. It is
also believed that a tribunal may properly recognize the existence is known to most men due to its
universal application.
4. Laws appearing in official websites like those of the Office of the President or the Library Congress
may be properly recognized since these are official sites of government agencies which have custody of
laws.

What is Scrivener’s Error? This means failure of the agreement to express the intention of the parties.
This failure could be attributed to wrong terminology, missing terminology, or simply clerical error,
Because the agreement does not embody the intention of the parties, the chosen law is often disregard
resulting in a course of action which the parties may not have contemplated or wanted.
 CHAPTER III
CONTRACTS

contract – is an agreement among several parties involving the delivery of a product or the
performance of an act. In the establishment of a contract, the parties are free to stipulate the terms and
conditions of their relationship. These terms and conditions become the law of the contract which the
parties are bound to observe. For a contractual relation to induce a conflict of laws scenario, it is
imperative that the contract involve a foreign element. This foreign element could take the form of an
alien individual becoming a party to the contract or the parties choosing a foreign law as their choice of
law. It could also happen that the places of execution and performance are different from each other.

NOTE: Contracts are subject to the law stipulated by the parties to be their choice of law. The default
law is the law of the place where the contract is executed or the lex loci contractus.

The principle of party autonomy to contract in contracts is not, however, an absolute principle.
Exceptions:
Article 1306 of the Civil Code allows the parties to a contract to “establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order and public policy.

CHOICE OF LAW STIPULATIONS

The principle of autonomy of contracts – allows the parties to stipulate the law that shall govern their
contractual relations. A choice of law stipulations will greatly aid in the achievement of the objectives
of the parties in enterinf into a contract.
If the parties do not specify the extent of the applicability of their chosen law, the chosen law will
normally apply to the following concerns.
(1) interpretation
(2) rights and obligations arising from the contract
(3) performance and the consequences of non-performance, including the assessment of damages
(4) the various ways of extinguishing obligations, and prescription and limitation periods
(5) validity and the consequences of invalidty of the contracts
(6) burden of proof and legal presumptions and
(7) pre-contractual obligations

WAIVER OF RENVOI – Parties may even waive the application of renvoi in case the same is
provided for by a foreign law. This means that the rules of private international law will find no
application once a foreign law is chosen by the parties. Renvoi is a complicated doctrine since it
usually mandates the parties to look to the totality of foreign law in determining their rights and
obligations.

There is a growing trend of excluding conflict of law provisions in choice of law stipulations in
contracts. For example:

Article 8 of The Hague Principles on Choice of Law in International Commercial Contracts

specially provides that “a choice of law does not refer to rules of private international law of the law
chosen by the parties unless the parties expressly provide otherwise.”
Is choice of law mandatory? No. Most agreements, especially those that are to be performed locally,
do not specify the law applicable since the mindset of the parties are already focused on the local law.
What law that governs the capacity to contract? Capacity to contract is generally governed by the
national law of the parties. Under Article 15 of the Civil Code of the Philippines “laws relation to
family rights and duties, or to the status, condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad.” Thus, there is a need to look at the national law
of a person in determining a contracting party’s capacity to enter into a contract. There are situations,
however, when the national of the contracting party would point to the lex loci contractus, in which
case the party’s national law would become in application.

APPROACHES TO CONTRACTUAL CONFLICTS OF LAW

1. Lex loci contractus – the law of the place were the contract is executed. The reason behind this
approach is that the parties mindsets are usually focused on the law of the place of the execution when
they enter into contracts. Without specifying any choice of law, it is understood that the parties wanted
the local law to govern their contractual relation.
2. Lex loci celebrationis – the law of the place where the contract is performed or celebrated. The
reason behind this principles is that since a contract is to be performed in a particular place of state, it is
but proper that the law of the state govern the relationship of the parties
3. State of the most significant relationship rule – or the law of the place with the most connection to
the dispute. This is basically a matter of convenience and practicality as it seeks to apply the law of the
place that has the most connection factors to the contract. This approach is embodied in Section 188 of
the Restatement (Second) of Conflict of Laws which provides the following:

Section 188. Law Governing In Absence Of Effective Choice By The Parties

(1) The rights and duties of the parties with respect to an issue in contract are determined by the local
law of the state which, with respect to that issue, has the most significant relationship to the transaction
and the parties under the principle stated in 6.

(2) In absence of an effective choice of law by the parties, the contracts to be taken into account in
applying the principles to determine the law applicable to an issue include:
(a) the place of contracting
(b) the place of negotiation of the contract
(c) the place of performance
(d) the location of the subject matter of the contract
(e) the domicile, residence, nationality, place of incorporation and place of business of the
parties

Depecage – this refers to the process whereby different issues in a single case arising out of a single set
of fats may be decided according to the laws of different states. This has always been the process when
procedural matters were held to be governed by forum law and substantive questions by some other
law, even when matters characterized as procedural had substantial outcome-determinative effect. It has
always been understood also that different substantive issues could properly be decided under the laws
of different states, when the choice-influencing considerations differ as they apply to the different
issues.

Philippines follows lex loci contractus – in settling choice of law problems in contracts. This clear
and unequivocal declaration means that our courts are obliged to apply the law of the place of
execution of the contract in a case a conflict of laws dispute concerning contracts is brought to the
courts. Hence, if a contract is executed in the Philippines, and the contract specifies no choice of law,
the governing law will be Philippine law.

Defenses to Jurisdiction and Choice of Law – Conflict of laws involves three phases and they are
jurisdiction, choice of law, and recognition and enforcement of judgment. These three phases are
separate from each other that a defense in one phase is no a defense in other phases. For example, the
doctrines of lex loci celebrationis and lex loci contractus are grounds to question the jurisdiction of the
court. In like manner, the defense of forum non conveniens cannot be used as a defense to choice of
law disputes. Thus, it is important important to analyze the real issues in a conflicts problem for the
purpose of utilizing the appropriate approach to a contractual dispute.

CHAPTER 4
TORTS AND DAMAGES

Quasi-delicts or torts are sources of obligations under the Civil Code. Article 2176 of the Civil Code,
“whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage done”.

The elements of a quasi-delict are:

(1) the damages suffered by the plaintiff;
(2) the fault or negligence of the defendant or some other person
(3) the connection of cause and effect between the fault or negligence and the damages incurred; and
(4) that there must be no preexisting contractual relation between the parties.

Concept of Negligence
Negligence – consists in the omission of that diligence which is required by the nature of the obligation
corresponds with the circumstances of the persons, of the time and of the place. In determining
negligence, the standard employed is the ordinary prudent person test: It was the duty of the actor to
take precautions to guard against that harm. Reasonable foresight of the harm, followed by ignoring
of the suggestion born of this prevision, is always necessary before negligence can be held to exist.
Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have
foreseen that an effect harmful to another was sufficiently probable against its consequences.

Conflict of Laws in Torts – Problems usually arise when a foreign element is involved. Conflicts
usually occur in cases of cross-border torts when the act or conduct causing the injury happens in one
state while the resulting while the resulting injury is felt in another state. Conflict of laws arises as
states employ differing approaches in resolving torts cases.

Approaches to Conflicts’ Torts

There are several approaches to conflicts torts:
1. Lex loci delicti or the vested rights doctrine – The application of the law of the place where the
injury or damage was sustained. This is based on the vested rights theory since the rights of the parties
vested in the place of injury and nowhere else. When someone is wronged in a particular place, the
rights of the parties arise from that jurisdiction whose law must then be applied to determine the
parties’ rights and liabilities.
2. Governmental interest analysis approach – A three-tiered approach that involves an examination
of whether there is a difference in the law of the jurisdictions involved, whether there is a true conflict
of law, and if a true conflict exists, the court will apply the law of the state whose interests is more
impaired.
3. Choice-influencing consideration approach – This approach requires an examination of several
factors to determine the applicable law. These five factors are (1) predictability of result; (2)
maintenance of the interstate and international order; (3) simplication of the judicial task; (4)
advancement of the forum’s governmental interest; (5) application of the better rule of law.
4. Lex fori – An approach where the rights and liabilities of the parties are governed by the law of the
forum
5. Most significant relationship approach – an examination is made as to what state has the most
connection to a case. The points of contacts are:
(1) the place where the injury occured;
(2) the place where the conduct causing the injury occurred;
(3) the domicile, residence, nationality, place of incorporation and place of business of the parties, and
(4) the place where the relationship, if any, between the parties is centered

Lex loci delicti vs. Most significant relationship

Jurisdictions which employ lex loci delicti favor its simplicity, ease of application, stability. And
predictability. With this approach, all that is needed to be done is apply the law of the place of injury
with no need for contacts-counting. It is disfavored, however, because it is inflexible and does not
respond to the needs of modern litigation.

Jurisdictions that employ the most significant relationship approach favor its responsiveness to modern
times and litigation, flexibility, fairness, and judiciousness. Proponents of this approach argue that there
is greater chance of justice being obtained as in Saudi Arabian case. It is also fine-tuned to modern
litigation where it is difficult to pinpoint the place of injury or where the place injury could be in
several states. It is described, however, as eclectic, for its tendency to ignore stare decisis, making
judicial decisions unpredictable.