Keong Min Oh
Conflict of Laws
Prof. Perez

Lilienthal v. Kaufman

Majority First restatement Opinion:

The First restatement is heavily focused on vested rights theory. The case at bar deals with the collection of unpaid two promissory notes. The right in this case was vested at particular forum where the place of making was. The contract to buy binoculars was executed and formed in California. “The defendant went to San Francisco to ask the plaintiff, a California resident, for money for the defendant’s venture. The money was loaned to defendant in San Francisco, and by the terms of the note, it was to be repaid to plaintiff in San Francisco.” Lilienthal v. Kaufman, P.2d 543 (Or. 1964). Since the defendant and plaintiff agreed for the contract to be formed was based in California, California law is to be applied in this case, thus allowing the plaintiff to recover.

Dissent:

Although vested rights theory allows the plaintiff to recover under California law, the first restatement of conflict of laws provides three escapes when the outcome is not preferred. The particular theory relevant in this case is “public policy” escape. Oregon’s public policy is shown on its legislative history. Oregon has a strong policy protecting innocent persons from fraud. The defendant in this case was a spendthrift who is placed under the guardianship. The defendant was aware of the fact that if his control of the funds was under the guardian’s authority. The defendant did not place the plaintiff on notice that he was a spendthrift and purchased binoculars without sufficient funds in his account. However, despite the fact that Oregon disfavors fraudulent activities, the legislators have enacted law which states spendthrift’s contracts are voidable. Nothing more than legislative history shows the public policy of the particular state. Since all sovereign states seek to