Legal Definitions - locus solutionis

Locus solutionis refers to the specific geographical location where a legal obligation, typically arising from a contract, is intended to be fulfilled or performed. It identifies the agreed-upon place where an action must take place, goods must be delivered, or a service must be rendered to satisfy a contractual duty.

• Example 1: Construction Project

  Imagine a construction company based in Texas is hired by a client to build a new office complex in Arizona. The contract specifies that all construction work, inspections, and final handover will occur at the building site in Phoenix, Arizona.

  In this scenario, the locus solutionis is the construction site in Phoenix, Arizona. This is the designated place where the construction company's primary obligation (building the complex) is performed. If a dispute arises regarding the quality of the work or delays, the laws of Arizona might be more relevant, and an Arizona court might have jurisdiction because that's where the performance took place.

• Example 2: International Sale of Goods

  A wine distributor in France sells a large shipment of wine to a restaurant chain in New York. Their sales contract states that the wine will be delivered "FOB New York Port," meaning the seller's responsibility ends, and ownership transfers, once the wine is loaded onto a ship and arrives at the port in New York.

  Here, the locus solutionis for the delivery obligation is the port in New York. This is the point where the French distributor completes their performance by making the goods available as per the agreement. If the wine is damaged during transit *after* arriving at the New York port but *before* reaching the restaurant, the restaurant chain would likely bear the loss, as the seller's performance was completed at the designated locus solutionis.

• Example 3: Loan Repayment

  A person takes out a mortgage loan from a bank located in Florida to purchase a house in that state. The loan agreement stipulates that all monthly payments must be made to the bank's designated account, which is held at its main branch in Miami, Florida.

  The locus solutionis for the loan repayment obligation is the bank's main branch in Miami, Florida (or specifically, the account held there). Even if the borrower sends the payment from another state, the performance of the payment obligation is considered complete when the funds are successfully received and processed at the designated location in Florida. This location would be crucial if there were a dispute about whether a payment was made on time or if a default occurred.