Choice of Law for Contracts

Question 1

When may parties determine choice of law under a contract by stipulation?

Answer 1

Parties may agree to apply the law of a certain state if it is expressly stated in the contract and:
1. the stipulation doesn’t appear as boiler-plat language in an adhesion contract
2. the parties picked a state that has a substantial relation to the contract
3. the lat of the parties’ chosen state does not violate the public policy of that state with the most significant relationship to the issue in question

Question 2

If no stipulation, how does choice of law get determined for a contract under the First Restatement Vested Rights Approach?

Answer 2

The court applies the law of the state where the contract was made

Question 3

If no stipulation, how does choice of law get determined for a contract under the Second Restatement Most Substantial Relationship Test

Answer 3

Court determines the state with the most significant relationship by considering the policies and interests of those states where:
1. the parties negotiated the contract
2. the parties made the contract
3. the performance obligations were to be met
4. the subject matter of the contract is located
5. the parties are domiciled, reside, conduct business or are incorporated

Question 4

How is choice of law determined for contracts governed by the UCC?

Answer 4

If no stipulation by the parties, a state’s UCC can apply to any transaction that bears an appropriate relation to that state