Also known as:choice of law provisions · choice-of-law provision · choice-of-law provisions · choice of law clause · choice-of-law clause · governing law clause
Written by attorneys · grounded in primary & secondary sources — see below
A contractual clause designating the substantive law of a specified jurisdiction to govern disputes arising from the agreement. The clause guides courts and arbitrators in selecting the applicable rules for contract interpretation and performance issues.
Sources & Authorities
How it applies
Common Examples
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Long-Term Contract Supports Jurisdiction
Charles Cunningham, a Michigan resident, negotiated a multiyear berthing agreement with HarborGate Marinas, a Florida company. The contract required Cunningham's boats to winter annually at the Florida marina and contained a Florida choice of law provision. When HarborGate sued for unpaid fees in Florida court, the choice of law clause helped establish that Cunningham had purposefully directed activities toward Florida, supporting specific personal jurisdiction.
Insurance Policy Choice Clause
Catherine Carter purchased an insurance policy from Allstate Insurance Co. that included a choice of law provision selecting Minnesota law. After an accident involving her Minnesota employee, the clause directed application of Minnesota rules on coverage issues despite the policy being issued elsewhere.
Select any source to read its text and confirm it supports the definition.
Cases
Model Codes
Restatements
Casebooks
Study Supplements
Allstate Insurance Co. v. Hague449 U.S. 302, 308 n.11, 101 S.Ct. 633, 638 n.11, 66 L.Ed.2d 521 (1981)
Maritime Bill of Lading Clause
Cobalt Energy shipped cargo under a bill of lading containing a choice of law provision selecting Japanese law. When damage occurred at sea, the clause required the parties to arbitrate under the designated law while preserving COGSA protections.
Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer515 U.S. 528 (1995)
Arbitration Agreement Enforcement
Compass Logistics entered a franchise agreement with a choice of law provision selecting New York law and requiring arbitration of disputes. When a fee dispute arose, the clause supported compelling arbitration even though state unconscionability claims were raised.
American Express Co. v. Italian Colors Restaurant570 U.S. 228, 233 (2013)
International Distribution Contract
Copperfield Mining signed a distribution agreement with a Japanese manufacturer containing a choice of law provision selecting Swiss law and an arbitration clause. When a sales dispute emerged, the clause guided the tribunal to apply Swiss rules to contract claims.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.473 U.S. 614 (1985)
Alien Tort Claim Selection
Christopher Collins, a U.S. citizen, included a choice of law provision in a consulting contract selecting Mexican law for performance issues. When a related tort claim arose abroad, the clause directed the court to apply the selected law to contract aspects of the dispute.
Sosa v. Alvarez-Machain542 U.S. 692 (2004)
Common questions
Frequently Asked
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How does a choice of law provision affect personal jurisdiction analysis in contract disputes?+
A choice of law provision favoring the forum state serves as evidence that the defendant purposefully availed itself of the forum's legal system and reasonably anticipated suit there. Courts consider the clause alongside other factors such as the length of the relationship and contemplated future consequences in the forum.
When will a court refuse to enforce a choice of law provision in a contract?+
A court may decline to enforce the provision if it contravenes a fundamental public policy of the state with a materially greater interest in the issue or if the chosen state lacks a substantial relationship to the parties or transaction.
Does a choice of law provision in an attorney-client agreement determine which ethics rules apply?+
A written agreement reasonably designating a jurisdiction may be considered when assessing whether a lawyer's belief about the predominant effect of conduct is reasonable, but the default rules under Model Rule 8.5 still control absent such an agreement.
Can parties use a choice of law provision to select rules for details of contract performance?+
Parties may effectively select law for performance details only if the choice would be valid under the law of the place of performance and satisfies the requirements of Restatement section 187.
471 U.S. 462 (1985)Civil Procedure
…all suits concerning this Agreement be filed in Florida." App. 72. See also n. 5, supra. The Court of Appeals reasoned that choice-of-law provisions are irrelevant to the question of personal jurisdiction, relying on Hanson v. Denckla for the proposition that "the center of gravity for choice-of-law purposes does not necessarily…