Alaska Airlines v. Stephenson - 217 F.2d 295 (9th Cir. 1954)

Rule:

If the lex loci contractus is procedural and the law of the Territory of Alaska is primarily substantive, the fundamental public policy of the territory should require that no contract invalid under the Alaska statute of frauds, if made in Alaska, escapes invalidity under the statute of frauds just because it is made outside of Alaska.

Facts:

Arthur W. Stephenson was hired by Alaska Airlines, Inc.. After he was dismissed from his duties, Stephenson brought suit against Alaska Airlines for salary beyond the time he was carried on its payroll and for moneys claimed due on his expense account and salary due except for an offset claimed by Alaska Airlines. The district court found in favor of Stephenson. Alaska Airlines sought review. 

Issue:

Was New York Law applicable in this case?

Answer:

No.

Conclusion:

The court determined that where a contract was made in New York but concerned mainly Alaska business, Alaska's law should apply. Stephenson’s relinquishment of rights with another employer to contract with appellant satisfied the test for promissory estoppel. It held that if the lex loci contractus was procedural and the law of Alaska was primarily substantive, the fundamental public policy of the territory should require that no contract invalid under the Alaska statute of frauds, if made in Alaska, escaped invalidity under the statute just because it was made outside of Alaska. Alaska Airlines claimed that it was entitled to an offset from Stephenson’s claim for wages, payments made by him on a purchase contract for a house. The evidence indicated that it was entitled to offset his claim for payments he paid on a real estate contract. The judgment as modified was affirmed.