382 HARVARD LAW REVIEW, The only principle which can be stated is that the materiality of circumstances depends in all cases upon their tendency to show the intention of the parties, while their weight must be deter- mined by the circumstances of each individual case. 7.. It is always to be assumed, of course, that the parties are dealing upon the basis of good faith. If, therefore, it should appear that one party, at the time of the contract, entertained an expectation in regard to the law which should govern it, and that the other party had knowledge, or ought to have had knowledge, of this expectation, bona fides may require that the law so con- templated by one party shall be applied. This consideration may modify the effect of any or all of the foregoing circumstances in a particular case.^ If the intention of the parties to a contract is to be the control- ling fact in the choice of a governing law, it is important to under- stand in what sense that expression is used. In most cases it is probable that the parties at the time of contracting do not contem- plate the possibility of a question as to what law shall govern, and therefore entertain no conscious intention upon the point. In Hamlyn & Co. v. Talisker Distillery, it is very unlikely that either party knew or even suspected that the arbitration clause was void by the law of Scotland and valid by the law of England, and that it might be necessary to determine which law should govern. Nevertheless, the House of Lords held that the language of the contract clearly showed a mutual intention in respect to the gov- erning law. The case is an authority for the proposition that the expression " intention of the parties," in the choice of a govern- ing law, is used in the same sense in which it is used throughout the law of contracts. The law cannot look into the minds of parties; but it takes note of what they say and do, and determines their intention from their external acts.^ In cases where there is nothing in the language of the contract to show intention, the principle is the same. The question then is. What intention is reasonably to be inferred from all the material circumstances? or, as it was stated by Willes, J., in Lloyd v. Guibert, " to what general law it is just to presume that the parties have submitted themselves in the matter." ^ The point to be emphasized is, that 1 See Bar (2d ed.), § 251, p. 548; § 253, p. 553. 2 Pollock, Contracts (6th ed.), 5; Holmes, The Common Law, 309. 8 L. R. I Q. B. 115, 120, 121.
