Kristinus v. H. Stern Com. E Ind. S.A. - 463 F. Supp. 1263 (S.D.N.Y. 1979)

Rule:

New York has some interest in ensuring that persons who transact business within its borders (and thus subject themselves to some extent at least to the authority of the state) honor obligations, including contracts made elsewhere. Usually, of course, this interest must bow to the paramount interest of the state or country where the contract is made in regulating the conduct of those within its territory. When the contract is to be performed in New York, however, New York's interest is heightened, since its ability to regulate business affairs and the rights and obligations of those within its territory is then directly implicated. In such circumstances, a New York court would decline to apply foreign law where that law would foreclose enforcement of a contract valid under New York law.

Facts:

The buyer was a Pennsylvania resident. The seller was a company with locations in Brazil and New York. The buyer purchased gems from the seller's Brazilian location. The buyer claimed that the seller's vice-president said that the buyer could return the gems for a refund in New York. The buyer returned the gems to the seller's New York location. The seller refused to issue a refund. The buyer filed an action against the seller for specific performance of the oral promise. The seller filed a motion to dismiss the action on the ground that the oral promise was unenforceable pursuant to articles 141, 142 of the Brazilian Civil Code. 

Issue:

Would New York court apply the law of the state of New York in the circumstances of this case?

Answer:

Yes.

Conclusion:

The court held that in New York the law of the jurisdiction having the greatest interest in the litigation was applied. The court determined that Brazil had an interest in protecting persons who transacted business there. However, the court ruled that New York had a greater interest in ensuring that persons who transacted business within its borders honored contracts performable in New York. Therefore, the court held that New York law applied to the action.