Conflicts of Law Flashcards
What are the 3 Choice of Law Theories?
- Traditional Vested Rights Approach
- Most Significant Relationship Approach (Rest. 2nd)
- Governmental Interest Approach
Traditional Vested Approach
- Under this approach, apply the law of the state where transaction or event occurred.
1. Examples: place of wrong/injury, where contract was formed/performed, location of real property.
Most Significant Relationship Approach
Under this approach, apply the law of the state having the most significant relationship to the transaction and the parties.
When determining which state has the most significant relationship, the forum court generally considers the contacts that link each jurisdiction to the case, as well as the seven policy principles that are set forth in the Restatement (Second) of Conflict of Laws (see outline).
Governmental Interest Approach
Under the governmental-interest approach, it is presumed that the forum state will apply its own law, but the parties may request that another state’s law be applied. If a party makes such a request, then that party must identify the policies of competing laws.
The court weighs the interests of the states involved.
- If there is a false conflict (i.e., the forum has no interest in the litigation), then the court applies the law of the state that does have an interest in the case.
- If there is a true conflict (i.e., the forum state and another state both have an interest in the litigation), then the forum state will review its own policies to determine which law should apply.
- If the conflict cannot be resolved, then the law of the forum state is applied.
*This approach DOES NOT change depending on the type of action involved. e.g. same in Torts and Contracts
Torts
Traditional Vested Rights Approach
Apply the state law where the wrong or injury occurred.
Torts:
Most Significant Relationship Approach
Under the most-significant-relationship approach the court considers four important contacts:
(i) the place of the injury,
(ii) the place where conduct causing injury occurred,
(iii) the domicile, residence, place of incorporation, or place of business of the parties, and
(iv) the place where the relationship is centered.
Torts:
Governmental-interest approach
Under the governmental-interest approach, the forum state generally looks to its own law, so long as that state has a legitimate interest in applying its own law.
*Again, doesn’t change because of the type of claim.
Contracts with a Choice of Law Provision
If there is an express choice-of-law provision in the contract, then that law will govern unless:
- It is contrary to public policy;
- There is no reasonable basis for the parties’ choice; or
- There was fraud or mistake and true consent was not given.
Contracts With No Valid Choice of Law Provision:
Traditional Vested Rights Approach
Apply the law of the state where contract was executed or is to be performed.
Contracts With No Valid Choice of Law Provision:
Traditional Vested Rights Approach
The law of the place where the contract is executed will apply to the following issues:
- Validity of the contract;
- Defenses to formation of the contract; and
- Interpretation of the contract.
Contracts With No Valid Choice of Law Provision:
Traditional Vested Rights Approach
The law of the location where the contract was to be performed will apply to:
- Details of performance such as time and manner of performance;
- The person who is obligated to perform and the person to whom performance is to be made;
- Sufficiency of performance; and
- Excuses for nonperformance.
Contracts With No Valid Choice of Law Provision:
Most Significant Relationship Approach
Under the most-significant-relationship approach, the following factors are considered, in addition to the seven policy factors:
- The location of the contracting, negotiation, and performance;
- The place where the contract’s subject matter is located; and
- The location of the parties’ domiciles, residences, nationalities, places of incorporation, and places of business.
Contract Default rules
There are also default rules that apply to certain kinds of contracts.
Land contracts are controlled by the law of the state of the situs (location) of the land.
Personalty (personal property) contracts are controlled by the law of the state where the place of delivery is located.
Contractual Forum-Selection Clause
Courts will enforce a contractual forum-selection clause to transfer venue of an action UNLESS special factors are present (i.e. significant/unusual hardships or inequality of bargaining power).
