When two parties, living under different systems of law, enter into a personal contract, which of these systems must be applied to its construction depends upon their mutual intention, either expressed or implied.
By contract executed in London, an English firm agreed to buy from distillers in Skye all grains made by them at a specified price, and to erect a grain-drying machine at the distillery. The distillers agreed to maintain the machine and to bag up their grains in the sacks of the English firm, and deliver them free at a port in Skye. The contract further provided-‘Should any dispute arise out of this contract, the same to be settled by arbitration by two members of the London Corn Exchange or their umpire in the usual way.’
Held (rev. the decision of the First Division) that the language of the reference clause indicated that the parties intended it to be interpreted and governed by English law, and being valid by that law the Scottish Court must give effect to it.
Citations:
[1894] UKHL 642
Links:
Jurisdiction:
Scotland
Contract
Updated: 18 May 2022; Ref: scu.634086