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Choice of Law
Rutgers University, Newark School of Law
Sclar, Diana

Sclar; Choice of Law; Fall 2014

Introduction

1) Legislative Jurisdiction

2) Traditional Theory

3) Escape Devices

A Survey of Jurisdiction Selecting Rules

Tort Actions

1) Tort Actions (Alabama Great Southern Railroad Company v Carroll): Where a negligent act is committed in one state but causes injury in another, an action seeking damages for injuries sustained as a result of the act may be brought only in the state in which the result is manifested, and not where the act was committed

a. Recovery Determination: There can be no recovery in one state for injuries to the person sustained in another, unless the infliction of the injuries is actionable under the law of the state in which they were received

2) Traditional Choice of Law Theory

a. Territoriality: Every nation possesses an exclusive sovereignty and jurisdiction within its own territory

i. Effect: The laws of every state affect and bind directly all property, whether real or personal, within its territory; and all persons, who are resident within it, whether natural born subjects or aliens; and also all contracts made, and acts done within it

b. No state or nation can, by its laws, directly affect, or bind property out of its own territory or bind persons not resident therein, whether they are natural born subjects or others

3) The Place of the Wrong

a. State’s Legislative Authority: Each state has legislative jurisdiction to determine the legal effect of acts done or events caused within its territory

b. Tort Actions: The existence of a cause of action in tort depended upon the law of the place of the wrong

i. Definition: The place of the wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place

1. Arbitrary Test: The last event test is arbitrary because there is no claim unless all the elements are established. The tort may be consummated when the last act occurs, but it is being committed from the first to the last act and thus occurs at all those places

c. Defamation: Where harm is done to the reputation of a person, the place of wrong is where the defamatory statement is communicated

d. Invasion of Privacy: A cause of action for invasion of privacy depends on the law of the jurisdiction where the plaintiff was when his feelings were wounded

Contract Actions

1) Contract Law (Milliken v Pratt): A contract that is valid by the law of the state where it was made is enforceable everywhere, including states where such contracts are statutorily valid

a. Place of Contracting (Restatement Section 332): The law of the place of contracting determines the validity and effect of a promise with respect to:

i. Capacity to make the contract

ii. The necessary form, if any, in which the promise must be made

iii. The mutual assent or consideration, if any, required to make a promise binding

iv. Any other requirements for making a promise binding

v. Fraud, illegality, or any other circumstances which make a promise void or voidable

vi. Except as stated in section 358, the nature and extent of the duty for the performance of which a party becomes bound

vii. The time when and the place where the promise is by its terms to be performed

viii. The absolute or conditional character of the promise

b. Laws Governing Performance (Section 358): The duty for the performance of which a party to a contract is bound will b discharged by compliance with the law of the place of performance of the promise with respect to

i. The manner of performance

ii. The time and locality of performance

iii. The person or persons by whom or to whom performance shall be made or rendered

iv. The sufficiency of performance

v. Excuse for non-performance

c. Determination of Place of Contracting:

i. Beale’s Treatise: The place of contracting is the place in which the final act was done which made the promise or promises binding

ii. Restatement: The principal event necessary to make a contract

1. Definition (Section 311): The law of the forum decides as a preliminary question by the law of which state questions arising concerning the formation of a contract are to be determined and this state is called the place of contracting

2. Determination: Under its Conflict of Laws rules, in determining the place of contracting, the forum ascertains the place in which, under the general law of Contracts, the principal event necessary to make the contract occurs. The forum at this stage of the investigation does not seek to ascertain whether there is a contract. It examines the facts of the transaction in question only so far as is necessary to determine the place of the principal event, if any, which, under the general law of Contracts, would result in a contract. Then, and not until then, does the forum refer to the law of su

issue. Other states have adopted the Interstate and International Procedure Act, which permits courts to determine the foreign law as a matter of law.

4) Foreign Law (Walton v Arabian American Oil Co)

a. Consequences of Failure to Prove Foreign Law: The law of the forum determines the consequences stemming from failure to prove foreign law. In an international case, the forum may therefore

i. Dismiss the Suit: If the foreign law is not proved, the forum may dismiss the case

1. Essential Element: If the plaintiff fails to plead or prove foreign law and attempts instead to rely on the law of the forum, the court can direct a verdict for the defendant, on the ground that the plaintiff had not made out an essential element of the case – namely, the law of the place of the wrong

ii. Apply Presumptions: Rather than dismiss the suit, the forum may resort tto a presumption that the law of the other state is similar to its own and then apply its own law. The presumption has een extended to include rudimentary principles of justice in non-common law states

iii. Apply law of forum: Finally a few courts and commentators advocate application of the forum’s own law where no other law has been established in its place on the theory that the parties either acquiesced in that law or waived the right to rely on the foreign law by failing to prove it

Renvoi

1) Renvoi: A forum’s choice of law rules may refer a matter to a foreign law for decision

2) Central Issue: The question then becomes is the reference to the whole body of the foreign law (including its choice of law rules) or to the purely internal rules of the foreign system (those rules that would apply to local litigation with no outside contacts)?

a. Whole Law: If the forum decides to apply the whole law of the other state, the choice of law rules of that state may differ from those of the forum, perhaps referring the forum court back to its own law or to that of a third jurisdiction (renvoi)