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Lilienthal v. Kaufman - 239 Or. 1, 395 P.2d 543 (1964)

Rule:

A court may decide whether or not the public policy of the forum is so strong that the law of the forum must prevail although another jurisdiction, with different laws, has more and closer contacts with the transaction. A court must consider the economic and social interests of the forum state. The choice-of-law rules should rationally advance the policies or interests of the several states.

Facts:

Plaintiff Lilienthal brought an action against defendant Leonard I. Kaufman, Jr. to collect on two promissory notes. Kaufman argued that he had previously been declared a spendthrift by an Oregon court and placed under a guardianship. The guardian declared that the obligations under the notes were void. Lilienthal contended that the notes were executed and delivered in California, which did not recognize the disability of a spendthrift, and that the Oregon court was bound to apply the law of the location where the contract was made. The trial court rejected Lilienthal's argument and entered a judgment in favor of Kaufman. Lilienthal sought appellate review.

Issue:

Was the Oregon court bound to apply the law of the location where the contract was made?

Answer:

No

Conclusion:

The Supreme Court of Oregon affirmed, holding that the law of the place of the making of the contract would usually apply unless the forum state had a strong public policy interest in applying its own laws. The court concluded that Oregon had a strong public policy interest in applying its laws protecting spendthrifts from liability.

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