Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It answers a neat logical problem. If the existence of a valid contract is itself in issue, the issue cannot be governed by the proper law of the contract, because if there is no contract there is no proper law. The device is the putative proper law, and this case applies it.
Facts
This course cites the case for the application of the putative proper law to the question whether an offer has been accepted, and does not set out its facts.
Held
Whether an offer has been accepted is determined by the law that would be the proper law if the contract were valid — the putative proper law.
Reasoning
Step one — state the circularity. The proper law is the law by reference to which the obligations under the contract are determined. Where the very existence of the contract is disputed, there is nothing yet to determine obligations under.
Step two — the device. Assume the contract valid, find the law that would then govern it by the ordinary ladder — express choice, implied choice, closest and most real connection — and use that law to decide whether the contract exists.
Step three — note the honest residue of doubt. This course records that it is uncertain whether the parties to a contract can choose a particular legal system as the putative proper law. Reproduce that uncertainty; it is the point of the head.
Exam use
It opens: What is the putative proper law? — define it, then give the two applications this course supplies.
The second application is Re Bonacina, on consideration: if the putative proper law is English law, the absence of consideration makes the purported contract void ab initio; if the putative proper law does not require consideration as a necessary element, a valid contract may result.
Show why the device is needed rather than merely clever. Formation questions — offer and acceptance, consideration, mistake as to the existence of the agreement — all arise before there is a contract to consult. Any system has to answer them somehow, and the alternatives are worse: the lex fori would invite forum shopping, and the lex loci contractus would make the answer turn on the frequently accidental place of contracting.
Keep the boundary with capacity clear. Capacity is the one head where the parties' express choice must not operate, because a party who lacks capacity cannot cure it by agreeing to a law under which he has it. That is also why the uncertainty about choosing a putative proper law matters.
It does not decide whether parties may nominate the putative proper law; the course leaves that open.