Bernkrant v. Fowler
Citation and Court
55 Cal. 2d 588 (1961), California Supreme Court
Facts
Granrud, a Nevada resident, made an oral promise to forgive a debt owed by the Bernkrants if they would make certain payments on a Nevada real estate transaction; in return, Granrud would leave them property by will to cover the balance. Granrud died without fulfilling the promise. California’s statute of frauds required such promises (to leave property by will) to be in writing, but Nevada had no such requirement, and the oral promise was enforceable there.
Issue
Which state’s law — California’s (requiring the promise to be in writing) or Nevada’s (not requiring writing) — governs the enforceability of the oral promise to make a will?
Holding
Nevada law applied; California’s statute of frauds was not intended to apply to a transaction substantially centered in Nevada, and applying California law would frustrate the parties’ reasonable expectations based on Nevada law.
Rule / Doctrine
Under interest analysis, a court must determine which state has the stronger interest in applying its law. Where the contract was made and performed in Nevada, the parties were Nevada residents, and Nevada had a policy of enforcing such oral promises, Nevada’s interest outweighs California’s, even though California’s court is hearing the case.
Significance
Bernkrant v. Fowler is a foundational California interest-analysis case, illustrating how courts abandon the traditional lex loci contractus rule in favor of examining the policies underlying each state’s law and the states’ relative interests in having their law applied.