## Facts

- An automobile rental company in Hartford, Connecticut rented a car to Sack.
- A Connecticut statute provided that an owner who rents a motor vehicle “shall be liable for any damage to any person or property caused by the operation of such motor vehicle while so rented or leased.”
- Levy rode as a passenger in the rented vehicle.
- In Massachusetts, Sack allegedly stopped and left the car on the highway in low-visibility weather without adequate warnings and without an operating tail light.
- Maginn, driving behind, allegedly struck the rear of Sack’s car, and Levy suffered serious injuries.
- Levy sued Sack, Maginn, and the rental company in Connecticut, asserting the rental company’s liability under the Connecticut statute.

## Issues

1. Whether the rental company’s liability to Levy was governed by Massachusetts law as the place of the accident or by Connecticut law as part of the Connecticut rental contract.
2. Whether the Connecticut lessor-liability statute functioned as an implied term of the rental agreement, creating a contractual obligation enforceable by injured members of the public as third-party beneficiaries.

## Decision

- The court reversed the judgment for the rental company and held the demurrer should have been overruled.
- The court held that the statutory obligation was incorporated into Connecticut automobile rental contracts and was governed by Connecticut law as the place of contracting.
- The court held that Levy was within the class for whose “direct, sole, and exclusive benefit” the obligation was imposed and could sue the rental company as a third-party beneficiary.
- The case was remanded for further proceedings on the merits.

## Legal Principles

- Liability arising from a contract is governed by the law of the place of contracting unless the contract is to be performed or to have its beneficial operation and effect elsewhere, or is made with reference to another jurisdiction’s law.
- A statute may be treated as importing an обязатель term into a contract formed within the state, making claims against a contracting party properly characterized as contractual even when the injury occurs out of state.
- When a statutory contractual obligation is imposed for the protection of the traveling public, an injured person within that protected class may enforce the obligation as an intended third-party beneficiary.
- A tort situs jurisdiction’s lack of a comparable statute does not defeat a lessor’s liability when the lessor’s duty is based on a contractual obligation created by the forum’s statute and attached to a forum-made contract.

## Conclusion

The court treated Connecticut’s lessor-liability statute as an implied term of the Connecticut rental contract, applied Connecticut law despite an out-of-state accident, and permitted an injured passenger to sue the lessor as an intended third-party beneficiary.


Levy v. Daniels' U-Drive Auto Renting Co., 108 Conn. 333, 143 A. 163 (Conn. 1928)