Choice of law
Encyclopedia
Choice of law is a procedural stage in the litigation of a case involving the conflict of laws
Conflict of laws
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute...

 when it is necessary to reconcile the differences between the laws of different legal jurisdictions, such as sovereign state
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

s, federated states (as in the US), or province
Province
A province is a territorial unit, almost always an administrative division, within a country or state.-Etymology:The English word "province" is attested since about 1330 and derives from the 13th-century Old French "province," which itself comes from the Latin word "provincia," which referred to...

s. The outcome of this process is potentially to require the courts of one jurisdiction to apply the law of a different jurisdiction in lawsuits arising from, say, family law
Family law
Family law is an area of the law that deals with family-related issues and domestic relations including:*the nature of marriage, civil unions, and domestic partnerships;...

, tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...

 or contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

. The law which is applied is sometimes referred to as the "proper law
Proper law
The Doctrine of the Proper Law is applied in the choice of law stage of a lawsuit involving the conflict of laws.-Explanation:In a conflicts lawsuit, one or more state laws will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are...

".

Sequence of events in conflict cases

  1. Jurisdiction. The court selected by the plaintiff
    Plaintiff
    A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...

     must decide both whether it has the jurisdiction to hear the case and, if it has, whether another forum is more suitable (the forum non conveniens
    Forum non conveniens
    Forum non conveniens is a common law legal doctrine whereby courts may refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties...

    issue relates to the problem of forum shopping
    Forum shopping
    Forum shopping is the informal name given to the practice adopted by some litigants to get their legal case heard in the court thought most likely to provide a favorable judgment...

    ) for the disposition of the case. Naturally, a plaintiff with appropriate knowledge and finance will always commence proceedings in the court most likely to give a favourable outcome. This is called forum shopping and whether a court will accept such cases is always determined by the local law.
  2. Recognition of foreign judgments. Even where a conflict of laws exists, the court will recognize the validity of a foreign judgment in most cases. Under U.S. law, this authority is part of the Full Faith and Credit Clause
    Full Faith and Credit Clause
    The Full Faith and Credit Clause is the familiar name used to refer to Article IV, Section 1 of the United States Constitution, which addresses the duties that states within the United States have to respect the "public acts, records, and judicial proceedings of every other state." According to...

     of the U.S. Constitution. Under International law, this authority is part of the doctrine of comity
    Comity
    In law, comity specifically refers to legal reciprocity—the principle that one jurisdiction will extend certain courtesies to other nations , particularly by recognizing the validity and effect of their executive, legislative, and judicial acts...

    . The court will invoke comity by its discretion and will usually look to two factors before using its discretionary powers: did the foreign court have jurisdiction, and were fair procedures used in adjudicating the case?
  3. Characterization
    Characterisation (conflict)
    In conflict of laws, characterisation is the second stage in the procedure to resolve a lawsuit involving a foreign law element. This process is described in English law as classification and as qualification in French law...

    . The court then allocates each aspect of the case as pleaded to its appropriate legal classification. Each such classification has it own choice of law rules but distinguishing between procedural
    Procedure (conflict)
    In all lawsuits involving conflict of laws, questions of procedure as opposed to substance are always determined by the lex fori, i.e. the law of the state in which the case is being litigated.-What issues are procedural?:...

     and substantive rules requires care. The court may have adopted a rule of law which prevents it from applying any procedural law other than its own. This can include the court's own choice of law rules. A danger exists if the choice of law requires that a case be heard elsewhere due to the forum's lack of expertise in deciding an issue of foreign law.
  4. The court
    Court
    A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...

     then applies the relevant choice of law rules. In a few cases, usually involving Family Law, an incidental question
    Incidental question
    In the Roman conflict of laws, an incidental question is a legal issue that arises in connection with the major cause of action in a lawsuit. The forum court will have already decided that it has jurisdiction to hear the case and will be working through the next two stages of the conflict process,...

     can arise which will complicate this process. The United States has adopted two laws that almost universally eliminate incidental questions involving family law. The Defense of Marriage Act (DOMA), permits states to ignore the doctrine of lex loci celebrationis
    Lex loci celebrationis
    The lex loci celebrationis is the Latin term for "law of the place where the marriage is celebrated" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...

    and apply only the laws of the forum state when deciding whether a marriage is valid. The Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) requires states to apply the law of the "home state;" that is, the forum which originally determined custody and maintenance. A state court will only apply its own law when no parent retains a connection with the original jurisdiction and when substantial evidence is available in its forum to make a custody or maintenance determination.

Choice-of-law stage

The "traditional approach" looks to territorial factors, e.g. the domicile
Domicile (law)
In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...

 or nationality
Nationality
Nationality is membership of a nation or sovereign state, usually determined by their citizenship, but sometimes by ethnicity or place of residence, or based on their sense of national identity....

 of the parties, where the components comprising each cause of action occurred, where any relevant assets, whether movable or immovable, are located, etc., and chooses the law or laws that have the greatest connection to the cause(s) of action. Even though this is a very flexible system, there has been some reluctance to apply it and various "escape devices" have developed, which allow courts to apply their local laws (the lex fori
Lex fori
Lex fori is a legal term used in the conflict of laws used to refer to the laws of the jurisdiction in which a legal action is brought...

) even though the disputed events took place in a different jurisdiction. The parties themselves may plead the case either to avoid invoking a foreign law or agree to the choice of law, assuming that the judge will not of his or her own motion go behind the pleadings. Their motive will be pragmatic. Full-scale conflict cases take longer and cost more to litigate. However, the courts in some states are predisposed to prefer the lex fori wherever possible. This
may reflect the belief that the interests of justice will be better served if the judges apply the law with which they are most familiar, or it may reflect a more general parochialism in systems not used to considering extraterritorial principles of law. One of the most common judicial strategies is to skew the characterization process. By determining that a claim is one involving a contract instead of tort, or a question of family law instead of a testamentary issue, the Court can change the choice of law rules. For example, if an employee is hired by an employer in State A, is injured due to the employer's negligence in State B, and files a lawsuit to recover for the injury in State A, the court in State A might look to the employment contract to see if it contained a clause that governed the employer's duty of care with respect to the employee. If so, the court may be able characterize the claim as a breach of the contract, instead of a tort, and apply the law of the State A either because it was the
place where the contract was made (the lex loci contractus
Lex loci contractus
In the conflict of laws, the lex loci contractus is the Latin term for "law of the place where the contract is made".-Explanation:When a case comes before a court and all the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to decide the case...

) or, if it were the place where the wage or salary was to be paid, where the contract was intended to be performed (the lex loci solutionis
Lex loci solutionis
The lex loci solutionis is the Latin term for "law of the place where relevant performance occurs" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...

).

In this context, it is noted that, since the 1960s, the courts in the United States began developing a number of new approaches, as well as new escape devices. This reflects the number of different laws that might be relevant in any given case before an American court. There is significant interstate trade and social mobility, and with the laws of each state of the Union representing a possible opportunity for conflict, it was necessary to produce a coherent system that could be applied in the courts of all fifty states.

Renvoi

To limit the damage that would result from forum shopping, it is desirable that the same law is applied to achieve the same result no matter where the case is litigated. The system of renvoi
Renvoi
In conflict of laws, renvoi is a subset of the choice of law rules and it may be applied whenever a forum court is directed to consider the law of another state.-The procedure for conflict cases:...

, which literally means "send back", is an attempt to achieve that end.

Traditional approach

The traditional approach is based on the idea that the territorial sovereignty
Sovereignty
Sovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...

 of states must be respected. For example, when an event happens in a state that gives rise to a lawsuit - if two parties are involved in an automobile accident, for example - that state in which the accident occurred provides the parties with certain "vested rights". These rights include such things as the ability of a plaintiff to file a lawsuit, the imposition of a statute of limitations
Statute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...

 to prevent a defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...

 from being subjected to a lawsuit after too much time has passed, limitations on recovery, and specified burdens of evidence. These so-called vested rights compete with the policy claims of other states for their laws to be applied. What follows is a generalised summary of the rules. The approach in the U.S. is rather different (see Conflict of laws in the United States
Conflict of laws in the United States
The choice of law rules in the conflict of laws in the United States have diverged from the traditional rules applied internationally. Choice of law is a procedural stage in the litigation of a case when it is necessary to reconcile the differences between the laws of different states, and in the...

).

Status

Status
Status (law)
A person's status is a set of social conditions or relationships created and vested in an individual by an act of law rather than by the consensual acts of the parties, and it is in rem, i.e. these conditions must be recognised by the world. It is the qualities of universality and permanence that...

 is relevant for a wide array of issues. Self-evidently, unless the proposed litigant has legal personality, there will be no jurisdiction. It will also be relevant to immigration
Immigration
Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...

, entitlement to social security and similar benefits, family law, contract, etc. The choice of law rule is the law of the domicile
Domicile (law)
In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...

 (lex domicilii
Lex domicilii
The lex domicilii is the Latin term for "law of the domicile" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are applied....

) if the forum is common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

, or law of nationality
Nationality
Nationality is membership of a nation or sovereign state, usually determined by their citizenship, but sometimes by ethnicity or place of residence, or based on their sense of national identity....

 (lex patriae
Lex patriae
The term lex patriae is Latin for the law of nationality in the conflict of laws which is the system of public law applied to any lawsuit where there is a choice to be made between several possibly relevant laws and a different result will be achieved depending on which law is...

) or habitual residence
Habitual residence
In conflict of laws, habitual residence is the standard used to determine the law which should be applied to determine a given legal dispute. It can be contrasted with the law on domicile, traditionally used in common law jurisdictions to do the same thing....

 if the forum is civil law
Civil law (legal system)
Civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections, as compared to common law systems that gives great precedential weight to common law on the principle that it is unfair to treat similar facts differently on different...

 applies to determine all question of status and its legal attributes. The lex fori determines the domicile, nationality or habitual residence, and applies that law to establish an in rem
In rem
In rem is Latin for "against a thing." In a lawsuit, an action in rem is directed towards a piece of property rather than against a person . The action disputes or seeks to transfer title to property. When title to real estate In rem is Latin for "against a thing." In a lawsuit, an action in rem...

 set of rights and capacities
Capacity (law)
The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will...

. Thus, under some laws, the status of illegitimate affects the rights of inheritance in the case of an intestacy, etc. As to corporations, the choice of law rule is the law of incorporation
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...

 (the lex incorporationis) for all matters of capacity, validity, shareholders' rights, etc.

Contracts

For a full explanation, see: contract (conflict)
Contract (conflict)
In the conflict of laws, the validity of a contract with one or more foreign law elements will be decided by reference to the so-called "proper law" of the contract.-History:...



The choice of law rules for contracts are more complicated than the law affecting other obligations because they depend on the express or implied intentions of the parties and their personal circumstances. For example, questions as to whether a contract is valid may depend on the capacity of the parties to enter into a contract. This could be decided by reference to the lex domicilii, lex patriae or habitual residence of the parties, or for policy reasons, by reference to the lex loci contractus. But, if the contract was made electronically, where the contract was actually made must first be decided either by the lex fori or the putative proper law depending on the forum rules. There may also be problems if the parties selected the place where the contract was made in the hope of evading
Evasion (law)
In law, the Doctrine of Evasion is a fundamental public policy. Whereas a person may legitimately plan his or her affairs so as to avoid the incidence of obligations or liabilities imposed by the law, no-one is allowed to evade the operation of otherwise mandatory provisions once duties and...

 the operation of some mandatory provisions in another relevant law.

On the other hand, deciding matters relating to performance will usually depend on the lex loci solutionis. Another unique characteristic of contracts is that the parties can decide which law should apply for most purposes, and memorialize that decision into the contract itself (see forum selection clause
Forum selection clause
A forum selection clause in a contract with a conflict of laws element allows the parties to agree that any litigation resulting from that contract will be initiated in a specific forum...

 and choice of law clause
Choice of law clause
A choice of law clause or proper law clause is a term of a contract in which the parties specify that any dispute arising under the contract shall be determined in accordance with the law of a particular jurisdiction.-Explanation:...

) although not every jurisdiction will enforce such provisions. For the harmonising
Harmonisation
Harmonisation may refer to:* In music, the implementation of harmony, usually by using chords, including harmonized scales* Harmonisation of law, the process of establishing common laws and standards across the European Union...

 provisions on contractual obligations in EU law, see the Rome Convention (contract)
Rome Convention (contract)
The Convention on the Law Applicable to Contractual Obligations 1980 is a measure in private international law or conflict of laws which aims to create at least a harmonised, if not a unified, choice of law system in contracts within the European Union...

.

The Rome I Regulation
Rome I Regulation
The Rome I Regulation is a regulation which governs the choice of law in the European Union. It is based upon and replaces the Convention on the Law Applicable to Contractual Obligations 1980...

 constrains the choice of law for special types of contracts. With a view to the weaker parties, such as consumers, employees and insurants, special choice of law rules are laid down by articles 5-8. The most important rules for companies, mostly closing contracts with consumers, are listed in Art. 6. Art. 6 (I) defines the consumer contract as a contract where the consumer acts as a private person whereas the businessman acts for his commercial purpose. This articles also says that in absence of an explicit choice of law, a protected consumer contract is governed by the law of the consumer's habitual residence. In Art. 6 (II) the involved parties are given the possibility of a free choice of law. But the choice of law is legally void, if the consumer protection is limited by this choice.

Tort

For a full explanation, see: tort (conflict)
Tort (conflict)
In conflict of laws, the choice of law rules for tort are intended to select the lex causae by which to determine the nature and scope of the judicial remedy to claim damages for loss or damage suffered.-History:...



The presumptive rule for tort is that the proper law
Proper law
The Doctrine of the Proper Law is applied in the choice of law stage of a lawsuit involving the conflict of laws.-Explanation:In a conflicts lawsuit, one or more state laws will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are...

applies. This is the law that has the greatest relevance to the issues involved. In public policy terms, this is likely to be the law of the place of the where the key elements of the "wrong" were performed or occurred (the lex loci delicti commissi
Lex loci delicti commissi
The lex loci delicti commissi is the Latin term for "law of the place where the delict [tort] was committed" in the conflict of laws. Conflict of laws is the branch of law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...

).

Family law

For a full explanation, see: marriage (conflict)
Marriage (conflict)
In conflict of laws, the issue of marriage has assumed increasing public policy significance in a world of increasing multi-ethnic, multi-cultural and multi-national relationships...

, nullity (conflict)
Nullity (conflict)
In conflict of laws, the issue of nullity in Family Law inspires a wide response among the laws of different states as to the circumstances in which a marriage will be valid, invalid or null...

, and divorce (conflict)
Divorce (conflict)
In modern society, the role of marriage and its termination through divorce have become political issues. As people live increasingly mobile lives, the conflict of laws and its choice of law rules are highly relevant to determine:...

.

As to marriage
Marriage
Marriage is a social union or legal contract between people that creates kinship. It is an institution in which interpersonal relationships, usually intimate and sexual, are acknowledged in a variety of ways, depending on the culture or subculture in which it is found...

, both formal and common law, the general rule is the lex loci celebrationis
Lex loci celebrationis
The lex loci celebrationis is the Latin term for "law of the place where the marriage is celebrated" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...

determines its validity, i.e. the law of the place where the marriage is celebrated, unless the purpose of the marriage offends a public policy of the domicile/nationality/habitual residence state. Hence, some states limit the capacity of their citizens to celebrate a monogamous
Monogamy
Monogamy /Gr. μονός+γάμος - one+marriage/ a form of marriage in which an individual has only one spouse at any one time. In current usage monogamy often refers to having one sexual partner irrespective of marriage or reproduction...

 marriage to a person of the opposite biological sex, or prohibit marriage between degrees of consanguinity
Consanguinity
Consanguinity refers to the property of being from the same kinship as another person. In that respect, consanguinity is the quality of being descended from the same ancestor as another person...

, etc. Questions of nullity
Annulment
Annulment is a legal procedure for declaring a marriage null and void. Unlike divorce, it is usually retroactive, meaning that an annulled marriage is considered to be invalid from the beginning almost as if it had never taken place...

 and divorce
Divorce
Divorce is the final termination of a marital union, canceling the legal duties and responsibilities of marriage and dissolving the bonds of matrimony between the parties...

 straddle Family Law and status because the outcome of the judicial proceedings affects status and capacities, and also overlap with the more general question of when the courts of one state will recognize and enforce the judgments of another state.

Property

For a full explanation, see: property (conflict)
Property (conflict)
In the conflict of laws, property law follows the terminology of the civil law systems which divides property into two types:* Immovables is the equivalent of "real property" in common law systems, i.e. it is land or any permanent feature or structure above or below the surface .* All other...



The rule for immovable property (called real property in common law states) is that the lex situs
Lex situs
The term lex situs refers to the law of the place in which property is situated for the purposes of the conflict of laws. For example, property may subject to tax pursuant to the law of the place of the property or by virtue of the domicile of its owner...

applies to all questions of title. Movable property (called personalty in common law states) claims are governed by the law of the state in which the property is located at the time the rights are supposedly created. An important distinction, however, must be made for a contract which has some incidental effect on property, both immovable and movable, such as a loan with property pledged as a collateral. If the property is incidental to the contract, then the contract is evaluated under traditional choice of law principles for a contract. If, however, the primary purpose of the contract is to transfer the property, then the entire contract will be evaluated under the law of the state where the property is located.

Trusts and succession

For a full explanation, see: trusts (conflict)
Trusts (conflict)
The Hague Convention on the Law Applicable to Trusts and on their Recognition, or Hague Trust Convention is a multilateral treaty developed by the Hague Conference on Private International Law on the Law Applicable to Trusts. It concluded on 1 July 1985, entered into force 1 January 1992, and is as...

 and succession (conflict)
Succession (conflict)
In the conflict of laws, the subject of succession deals with all procedural matters relevant to estates containing a "foreign element" whether that element consists of the identity of the deceased, those who may inherit or the location of property...



Where an inter vivos
Inter vivos
Inter vivos is a legal term referring to a transfer or gift made during one's lifetime, as opposed to a testamentary transfer ....

 or testamentary trust includes immovables, reference must be made to the lex situs on all aspects relating to title and land use. Similarly, title to movables including choses in action
Chose (English law)
Chose , is a term used in common law tradition in different senses. Chose local is a thing annexed to a place, such as a mill. A chose transitory is something movable, that can be carried from place to place...

, should be determined by lex situs, i.e. the law of place where each item is located at the time the trust is created. Once created, all questions of administration are governed by the law specified in the trust instrument. In the unlikely event that the instrument is silent, the trust would be governed by the proper law.

All questions of prenuptial trusts and transfers are determined by the law of the transferor's domicile, nationality or habitual residence at the time of the marriage.

All questions relating to wills (and, as an incidental question, any testamentary trusts which the will purports to create), are governed by the law of domicile, nationality or habitual residence at the time of death. Questions of title affecting immovables are determined under the lex situs.
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