Conflict of Laws

Question 1

Contract Conflicts: General Rule

Answer 1

Historically, Michigan law favored applying the vested rights approach of the First Restatement. However, dicta suggests that the more appropriate approach is the Restatement (Second) of Conflicts.

Michigan applies the significant relationship test, under s. 187-88 of the Restatement (Second) of Conflicts. The court examines:

1. The place of contracting
2. The place of negotiating the contract
3. The place of the subject matter of the contract
4. The place of performance
5. The residence, domicile, nationality, place of business, and place of incorporation of the parties.

MI law will apply if more factors favor MI.

Question 2

Contracts: Choice-of-Law Provisions

Answer 2

A COL is enforceable if the issue is something resolvable under the contract, or otherwise, unless:

1. The chosen state has no substantial relationship to the parties/transaction; and
2. There is no other reasonable basis for the chosen state, or application of the chosen state would be contrary to state policy

Question 3

Tort Conflicts: General Rule

Answer 3

MI courts will employ MI law unless there is a rational reason to do otherwise. The court will follow a two-step analysis, here:

1. Does a foreign state have an interest in having its law apply?
2. If so, do MI interests mandate that MI law apply, despite the foreign state’s interest?

HOW TO APPLY THE TEST:

1) Does the foreign state have an interest:
- If not, MI law will apply (look to see if it would violate the other party’s DPC rights, or if it would encourage forum shopping)
- If so, move on to step 2

2) Do MI’s interests mandate applying MI law? The court assesses the s. 145 factors of the Restatement (Second) of Conflicts:
1. The place where the injury occurred
2. The place where the conduct (misconduct) causing the injury occurred
3. The place where the relationship between the parties is centered
4. The domicile, residence, nationality, place of business/incorporation of the parties

For the balance, consider where the location of the conduct you are suing for took place. For example, if you are suing for products liability for a car accident, don’t think about where the car accident was. Think about where the REASON for the car accident happened.

Also, if someone is suing for something like punitive damages (to punish), the state of the corporation likely has a significant interest because of their interest in ensuring the economic health of its companies.

Question 4

Statute of Limitation Conflicts: General Rule

Answer 4

SOL is procedural. Usually, the court applies its own SOL, unless it would be barred by the law of a state with a more significant relationship to the parties.

MI has a borrowing statute to use in instances where SOL is an issue:

1. If a non-resident (when the cause of action arose) brings suit in MI, it will be time-barred if barred under MI or the other state’s SOL
2. If a resident brings suit (on cause arising outside of MI), the MI SOL will apply.