choice of law clause

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choice of law clause

Frequently employed by a national company with real estate relationships in many states, the clause will state that the law of the company's headquarters will control any disputes between the parties.This is because the lawyers back at headquarters know their own law and know how to write contracts to protect themselves.If all their nationwide contracts were interpreted under the laws of the different states, it could be chaotic. Choice of law clauses are usually accompanied by forum shopping clauses,which specify which state's courts will hear disputes between the parties.

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Dubois Marine Specialties, the court upheld a choice-of-law clause providing that the parties' agreement was to be "construed and enforced in accordance with the laws of the state of Rhode Island," a clause similar to the present case where "[s]upplies and benefits shall exclusively be governed by German law.
According to that provision, a choice-of-law clause is invalid if without it, the local forum state's law would apply; if applying the other state's law would violate a "fundamental policy" of the forum state; and if the forum state has a greater interest in the outcome of the case.
The possibility of a choice-of-law clause is mostly considered as a side-issue, or as one that is problematic.
This choice-of-law clause is intended to reduce conflicts over which law will apply.
For example, a choice-of-law clause, while it may be desirable, is rarely worth fighting hard for in a commercial context; a contract with a state or parastatal enterprise without a forum clause and waiver of sovereign immunity is risky.
That is because some of these matters can be settled in advance of any litigation, for example, by including a forum-selection clause either a choice-of-court or arbitration clause--as part of the contract or transaction, or by providing for a choice-of-law clause.
However, the Court merely made a larger mess by confusing forum selection clauses with choice-of-law clauses, creating even more unanswered questions.
Florida would become the seventh state in the nation to modify its law governing the enforcement of contractual choice-of-law clauses in favor of foreign litigants that wish to bring their litigation to the U.
Choice-of-law clauses may raise similar problems, and whether an attorney fee clause exists will affect the litigation.
308) However, the Court noted in dicta that in the event the choice-of-forum and choice-of-law clauses operated in tandem as a prospective waiver of a party's rights to pursue statutory remedies, they would have little hesitation in condemning the forum clause as unenforceable against public policy.