Choice of Law for K Claims

Question 1

Choice of Law Provisions

Answer 1

Will be binding if:

• the stipulation does not appear in the boilerplate of an adhesion K
• the parties picked a state that has a substantial relation to the K
• the law of the parties’ chosen state does not violate the PP of the state with the most significant relationship to the issue in Q

Question 2

Vested Rights Approach

Answer 2

If there is no governing K provision, the court will usually apply the law of the state where the K was made. But if the issue concerns the performance or nonperformance of a party courts may look at the law of the place of performance.

Question 3

The Most Significant Relationship Approach

Answer 3

If there is no governing K provision, the court must determine which state has the “most significant relationship” to any particular issue requires a consideration of the policies and interests:

• the parties negotiated the K
• the parties made the contract
• the performance obligations were to be met
• the SM of the K is located; and
• the parties are domiciled, reside, conduct, business, or are incorporated

Question 4

Ks Governed by UCC

Answer 4

• The parties may stipulate that the UCC of a particular state shall govern their rights and duties under the K, so long as the transaction bears a reasonable relation to that state.
• When there is no such stipulation, a state’s UCC can apply to any transaction that bears an appropriate relation to that state.