§ 18.031.Foreign Interest Rate

A default rule that keeps a case moving when nobody proves the foreign law.

Unless the interest rate of another state or country is alleged and proved, the rate is presumed to be the same as that established by law in this state, and interest at that rate may be recovered without allegation or proof.

Two requirements, and both are needed to displace the presumption: the foreign rate must be alleged and it must be proved. Pleading it without evidence leaves the Texas rate in place, and so does proving it without having pleaded it.

The final clause is the practical half. A party relying on the Texas rate need neither plead nor prove it — the court applies it as a matter of law.

That reflects the ordinary position that a Texas court knows Texas law and must be shown the law of anywhere else.

The presumption exists because foreign law is a question of fact in the classic approach, and an unproved foreign rate would otherwise leave a gap: interest is owed, but at what rate nobody has established.

Rather than deny interest or send the parties away to prove it, the section supplies an answer.

Note the breadth of "another state or country" — the same rule governs a New York contract and a French one.

The section is confined to the rate. It does not decide whether interest is recoverable at all, over what period, or on what sum, which are governed by the substantive law applying to the claim and by the finance and damages provisions.