From MEE Flashcards
Contracts - choice of law provision
If there is an express choice-of-law provision in the contract, then that law will generally govern unless there is no significant basis for the parties’ choice or it is contrary to public policy.
2nd restatement
Parties can choose law that will apply to contract validity if:
Chosen state has substantial relationship to parties or transaction or
There is some other reasonable basis for the choice
Choice will be ignored if application of chosen law would be contrary to a fundamental policy of the state with most significant relationship to the issue
Approaches
State court will look to forum law to determine which choice of law rules to apply
Traditional (1st restatement)
Governmental interest analysis
Most significant relationship (2nd restatement)
Traditional (1st restatement)
Each state determines legal effects of events that occur within its territory
As soon as legally significant event occurs, a legal right becomes vested under the laws of the state where it occurred
Generally court need only determine where legal right vested and apply the law of that place
Right vests when last act takes place that is necessary to give plaintiff a cause of action
Government interest analysis
Law applies to set of facts if its application to those facts would promote the underlying purposes of the law
If the law of a state applies, it is “interested” in the case
To determine interest:
If only one state is interested, there is a false conflict
Court should apply law of only interested state
If more than one state is interested, there is a true conflict
Court should apply law of forum state
Court not supposed to balance interests of different state
If neither is interested, a court should apply the law of the forum
Interest based on:
Conduct-regulating laws and loss-shifting laws
Conduct
Designed to regulate conduct
Loss-shifting
Determine who can or cannot be liable
States have an interest in applying conduct regulating when wrongful conduct occurs within the territory of the state, causes injury in their territory, or when a state domiciliary is injured (regardless of where)
States have an interest in applying loss shifting when doing so would benefit a state domiciliary
Most significant relationship (2nd restatement)
Apply law of state with most significant relationship to the particular issue in question
3 guiding principles:
-Promoting the relevant policies of the forum and other interested states
-Systemic interests
Certainty, uniformity, predictability, simplicity
-Protecting justified expectations of the parties
Applies to planned transactions (contracts, trusts, real property)
Based on whether tort, contract, etc, there is a list of contacts that courts should consider in applying the guiding principles
There are presumptions based on type of issue
If no state has a more significant relationship, courts will apply forum law as tie-breaker
Depecage
Application of different states’ laws to different issues within same case
Renvoi
When court applies law of another state, it applies the whole law of the state, including state’s choice of law rules
All 3 of the above approaches typically reject renvoi except for issues involving property rights in land
Torts traditional
Governed by law of place where tort occurred
Last event necessary to create a tort is the injury
Apply law of place of injury
Tort government interest
No special rules for particular areas of law
Courts examine purpose and policies that underlie competing states’ laws to determine whether those states are truly interested
Conduct regulating States have interest in wrongful conduct if Occurs within territory Causes injuries in territory or Injures domiciliary of that state
Loss shifting
States have an interest when it would benefit a domiciliary
Torts 2nd restatement
Courts apply law with most significant relationship, considering guiding principles
Contacts to be balanced
Place where injury occurred
Place where conduct causing injury occurred
Domicile, residence, etc of parties and
Place where relationship between parties is centered
Presumption - law of place of injury is usually applied
Contracts traditional
Place of contracting will govern issues of contract, formation, interpretation, and validity
Where last act necessary to create contractual right occurred (generally place of acceptance)
Issues related to performance of contract are governed by place of performance
-Manner of performance, sufficiency, excuse
Contracts 2nd restatement
Determine state with most significant relationship to contract using guiding principles
Contacts:
Place of contracting, negotiation, and performance
Place where subject matter of contract is located and
Location of parties’ domiciles, residences, places of incorporation, or places of business
Presumption - if location of negotiation and performance are the same, law of that state usually applies
Marital property
Marital property
Any interest in prop that one spouse acquires in the prop of other spouse by virtue of marriage other than expectation of inheritance
Immovable
Governed by law of state where land is located
Movable
Governed by law of state where couple is domiciled at time of acquisition
Foreign law (another state’s law)
Modern approach - most states allow courts to take judicial notice of the laws of other states
defenses:
penal law
public policy
substance v. procedure - forum law governs procedural, parol evidence is substantive, governed by law of state that governs contract validity
evidentiary privileges, damages - 1st restatement considers procedural
Statute of limitations (foreign law)
1st - considered procedural
Except if SOL is inextricably bound up with statutory right, in which case it is considered substantive
2nd - generally forum applies own SOL if it would bar the claim
If forum would permit, should apply unless
Maintenance of claim would serve no substantial interest of the forum and
Claim would be barred under SOL of state having more significant relationship with issue
