What is Choice of Law?

A lawsuit can be brought in one jurisdiction, and the court sitting in that jurisdiction can apply the laws of another jurisdiction to the issues in question. This normally occurs when one of the parties formally requests that the court apply the other jurisdiction's laws. If the other party doesn’t agree with this request, then the court in which the suit has been brought must choose which law will govern the case. The process of deciding which law will apply to the case is called choice of law.

Choice of law issues normally arise when multiple jurisdictions have some type of connection to a case, and the laws of each of those jurisdictions could ultimately produce a different outcome in the case. Before the case is tried, it must be decided which jurisdiction’s law will govern each matter at hand. The contradictory laws at issue can be local, state, or provincial laws as well as federal or national laws. They can even be the laws of different countries. Determining which law will apply is generally considered procedural in nature, and a judge rather than a jury usually decides choice of law questions.

The choice of law used to govern a case can make a big difference in how the case is treated. For instance, jurisdictions often have different statutes of limitations, which set the time period in which a party has to file a suit, for the same type of civil harm. This means that a party may be barred from bringing a lawsuit in one jurisdiction if the statute of limitations has run out. The party could, however, bring the suit in another jurisdiction with a longer statute of limitations as long as the jurisdiction is deemed an acceptable choice of law.

In addition to statutes of limitations, a number of other potentially significant areas of a case can be impacted by choice of law. These areas are generally substantive in nature, meaning that they shape the parties' legal rights and duties. In contrast, choice of law generally doesn't impact procedural laws, which are the rules relating to how the trial is conducted. The court in which the case is being tried will generally apply its own procedural rules as opposed to the procedural rules of another jurisdiction.

In order to avoid a governing law conflict, legal contracts often include a choice of law clause. These clauses specify exactly which jurisdiction’s law will apply in the event a dispute arises between the parties. If the parties end up in litigation, the contract clause will typically be upheld by the court hearing the suit.