Law School Case Brief
Linn v. Emp'rs Reinsurance Corp. - 392 Pa. 58, 139 A.2d 638 (1958)
The formal validity of a contract is determined by the law of the state in which the contract was made. Since the provisions of the statute of frauds relate to formal validity, it is to the statute of the place of contracting that a court must refer.
Defendant, through its agent, telephoned plaintiff insurance broker and accepted a contract offer to provide reinsurance. Subsequently, plaintiffs sued, contending defendant did not pay plaintiffs the commissions agreed upon in the contract. The trial court found for the defendant and held that the contract had been made in New York, and was invalid under the New York Statute of Frauds. Plaintiffs appealed.
Did the New York Statute of Frauds invalidate the agreement between the parties?
The judgment was remanded because the trial court failed to properly establish in which state the parties entered into the contract at issue. The court followed the weight of case law and held that the contract was entered into in the state from which defendant's agent called to accept the offer. Thus, the laws of that state applied. However, as the trial record did not specify from which state the call originated, court remanded for further determination.
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