lex loci contractus
Meaning. The law of the place where a contract was made.
In conflict of laws, lex loci contractus was the traditional rule for deciding the validity and effect of a contract. Modern law prefers the “proper law of the contract”: the law chosen by the parties expressly or impliedly, or, failing a choice, the law with which the contract has the closest and most real connection. The place of making remains one factor.
Indian courts generally follow the proper law approach and give effect to the parties’ choice of law unless it is contrary to Indian public policy. Formal validity and capacity may still be tested by the place of contracting.
Example
In the absence of a choice-of-law clause, the court considered the lex loci contractus as one factor in identifying the proper law.