Choice of Law

Question 1

A choice of law issue may arise if two conditions are satisfied. What are they?

Answer 1

(1) The claim involves factual connections to multiple states
(2) The multiple states will have different laws leading to different results

Question 2

What is the general rule regarding which state’s laws will govern?

Answer 2

The governing law is that delayed by the forum court

According to its choice or law approach

And assuming no applicable constitutional or statutory restrictions apply.

Question 3

What are the two EXCEPTIONS to the choice of law approach?

Answer 3

(1) Diversity cases in Federal Court — the Court applies the choice of law in the STATE IN WHICH IT SITS
(2) Transferred Diversity cases — When a case is transferred within the Federal system, the Federal Court applies the choice of law approach or the TRANSFEROR COURT

Question 4

Which two RESTRICTIONS may limit the forum court’s choice of law approach?

Answer 4

(1) CONSTITUTIONAL: Due Process and Full Faith and Credit. — Constitution restricts using a state law that has NO significant contact with and/or legitimate interest in the litigation.
(2) STATUTORY: If Forum State has a statute directing the choice of law, apply that rule and not the usual choice of law approach (Borrowing Statute)

Question 5

If a bar exam question present facts indicating that the forum state lacks contact with the parties or subject matter of the action what is the issue that you’re likely being tested on?

Answer 5

Personal jurisdiction rather than the constitutional limitations of choice of law

Question 6

What are the three main analytical approaches for determining choice of law?

Answer 6

(1) Vested rights approach of the First Restatement
(2) The Most Significant Relationship approach of the Second Restatement
(3) Interest Analysis Approach

Question 7

Part 1: The Vesting Rights Approach means what?

Part 2: That law is determined how?

Answer 7

You apply the law of the State mandated by the applicable vesting rule.

The rule is selected according to the relevant substantive area of law.

Question 8

What is the rule regarding the application of the Most Significant Relationship Approach (the Second Restatement)?

Answer 8

You apply the law if the state which is most significantly related to the outcome of the case/litigation.

To determine this, the court will consider connecting facts and policy principles.

Question 9

In analysing the Most Significant Relationship Approach, what’s the 4 step approach you should adopt in your essay?

Answer 9

1. Discuss connecting facts
2. Discuss policy principles
3. Choose governing law based on which of the states has the more significant relationship
4. Apply that state’s law to determine the outcome.

Question 10

What is the rule regarding Interest Analysis?

Answer 10

The court will consider which states have a legitimate interest in the outcome of the litigation

Forum courts will apply its own law if it has legitimate interest

If not it will apply the law of another interested state.

Question 11

What are the 4 steps you need to analyse in order to determine the result of the Interest Analysis?

Answer 11

1. Discuss which states have a legitimate interest
2. Categorise the type of conflict
   — False conflict
   — True conflict
3. Choose a governing law based on the type of conflict
4. Apply the governing law to determine the results

Question 12

Regarding the Interest Analysis, if both states have a “true conflict” what will the forum state do?

And if it finds that a legitimate interest applies, what will it do?

Answer 12

Reconsider its own policies

Apply it’s own law.

Question 13

Regarding the Interest Analysis, if both states have a conflict, but after considering its own policies, the forum state decides that it doesn’t have a legitimate interest, what will it do?

Answer 13

Dismiss the case if forum non conveniens is available

If not, it can apply the law of the interested State or the State that most closely resembles its own law.

Question 14

With regard to a tort claim, what is the Vesting rule?

Answer 14

Governing law is where the injury took place.

Question 15

For the Second Restatement (Most Significant Relationship) approach to a Tort-related question, what analysis should you do?

Answer 15

Consider factual connections, like: place of injury, place where parties are at home, their place of business, etc.

AND

Policy Connections: meaning policies of the forum state and the connecting state.

Question 16

For the Interest Analysis approach to a Tort-related question, what analysis should you do?

Answer 16

Consider factual connections, like: place of injury, place where parties are at home, their place of business, etc.

AND

Policy Connections: meaning policies of the forum state and the connecting state.

Question 17

With regard to a tort question, the governing law is most likely to be based on what?

Answer 17

The state where the injury took place

Question 18

Typically, the key factor in determining which state’s laws to apply in a Tort case will be the place of injury. But there is an exception of two conditions are met. What are they?

Answer 18

Loss Distribution Rules — e.g. (1) loss limitations or damages caps, (2) vicarious liability, or (3) immunity rules

AND

The parties share a common domicile

Question 19

If one of the tort exceptions to the general rule that the place of injury is key apply, what is the result?

Answer 19

Apply the law of the common domicile.

Question 20

Choice of law rules will be displaced where a contract contains a choice of law clause, or what?

Answer 20

The provision will be valid if its EXPRESS

Question 21

In which 3 circumstances will a contractual choice of law provision typically be invalid?

Answer 21

(1) the choice of law has no reasonable relationship to the contract
(2) Lack of true mutual assent (e.g. misrepresentation about the content of the law)
(3) contrary to public policy

Question 22

What is the choice of law analysis if a contract case is asking about the Vesting Rule?

Answer 22

Question concerns contract FORMATION = apply the law of the place of execution

Question concerns contract PERFORMANCE = apply the law of the place of performance

Question 23

What is the Second Restatement Factual connections and Policy connections for determining choice of law in contract cases?

Answer 23

Factual connections = (1) place of contracting, (2) place of negotiations, (3) place of performance, (4) place of contract subject matter, and (5) place of domicile/incorporation of the parties.

Policy connections = consider (1). relevant policies of the forum state, (2) relevant policies of the connecting state, and (3) reasonable expectations of the parties.

Question 24

When analysing the choice of law rule for REAL property, both the First and Second Restatement will apply which state’s law?

Answer 24

The law of the situs (wherever the real property was located)

Question 25

When analysing the choice of law rule for PERSONAL property (inter vivos transfers), both the First and Second Restatement will apply which state’s law?

Answer 25

Look at the law of the situs at the time of the transaction

Question 26

When analysing the choice of law rule for PERSONAL property (transfer through inheritance), both the First and Second Restatement will apply which state’s law?

Answer 26

The law if the decedent’s domicile at the time of death.

Question 27

What is the choice of law rule regarding MARRIAGE?

Answer 27

A marriage if valid where performed will be valid everywhere.

But if a person temporarily moves to another state to marry in a way that wouldn’t have been recognised by their home state, then the marriage won’t be recognised (because it violates the Prohibitory Rule).

Question 28

Directory rules regarding marriage are what? Will failure to follow these rules render the marriage invalid?

Answer 28

They’re administrative (like obtaining a marriage license or having parental consent).

Failure to abide by these won’t render the marriage invalid in the state of domicile.

Question 29

What are Prohibitory Rules when it comes the rendering a marriage invalid?

Answer 29

Those which express a strong public policy of the state (like rules against incest, minimum age requirements etc.)

Question 30

Choice of law questions about the grounds for divorce will be governed by which state’s laws?

Answer 30

The law of the plaintiff’s domicile (i.e. the forum state)

Question 31

Choice of law questions about a child’s legitimacy will be governed by which state’s laws?

Answer 31

Legitimacy of a child is governed by the law of the mother’s domicile at the time of birth.

But subsequent acts of legitimation are governed by the father’s domicile.

Question 32

What are the two defences when it comes to applying the choice of law rules?

Answer 32

(1) PUBLIC POLICY — forum court won’t apply law that’s against its fundamental public policy.

Note: this is not the same as recognition of judgments!

(2) PROCEDURAL RULES — the forum court will always apply its own procedural rule.

Question 33

What are the forum court’s procedural rules which will override a choice of law consideration?

Answer 33

1. Civil procedure rules (general)
2. Burden of proof
3. Rebuttable presumptions
4. Statute of limitations (general)
5. Direct action statutes
6. Ability to bring a counterclaim
7. Privileges

Question 34

What are examples of substantive laws that won’t be procedural and therefore won’t override the choice of law analysis that the forum court needs to undertake?

Answer 34

1. Civil procedure that would change the outcome
2. Irrebuttable Presumptions
3. Statute of Limitations that condition a substantive right/limit a contractual right
4. Borrowing Statutes
5. Statute of Fraud
6. Parole Evidence
7. Contribution among joint tortfeasors
8. Survival action
9. Adverse possession
10. Damages