Conflict of Laws Flashcards
Domicile
-individuals
-corporations
-continuity
-change
- Domicile of Individuals (only one)
Domicile by Choice: In general, domicile will be where the person is present with the intent to remain for an unlimited time and when he abandons any prior domicile. Thus, courts will look at the person’s (a) physical presence and (b) intent to determine a person’s domicile.
- Domicile of Corporations: the state where it is incorporated.
Continuity of Domicile: Once established, a domicile is presumed to continue until a new domicile is acquired. The burden of showing a change in domicile is on the party that asserts it. Temporary or even
prolonged absences will not, by themselves, result in a change of domicile. Thus, a domiciliary
of one state can live in another state for years and retain his domicile in the original state, so long as he intends to return to that state.
Change in Domicile: A change of domicile takes place when a person with capacity to change his domicile is physically present in a place and intends to make that place home, at least for the time being. The physical presence and the intent must be at the same time.
Choice of Law Overview
When a cause of action involves contacts with more than one state, the forum court must determine which state’s law is to be applied to decide the issues in the case.
State choice-of-law rules generally have three sources: (i) specific choice-of-law statutes, (ii) contractual choice-of-law agreements, and (iii) general choice-of-law rules governed by forum state common law.
Constitutional Limitations
- Due Process:
Under the Due Process Clause of the Fourteenth Amendment, the U.S. Supreme Court has held that a forum state may apply its own law to a particular case only if it has a significant contact or significant aggregation of contacts with the state such that a choice of its law is
neither arbitrary nor fundamentally unfair. - Full Faith and Credit:
The Full Faith and Credit Clause requires a forum state to apply the law of another state when the forum state has no contacts with or interest in the controversy, but it does not
prevent the forum state from applying its own law when the forum has such contacts or interest in the controversy. However, it does not require a state to apply another state’s law in violation of its own legitimate public policy.
Party-Controlled Choice of Law
Most courts will enforce a contractual choice-of-law provision if it is:
- A valid agreement with an effective choice-of-law clause;
- Applicable to the lawsuit under the terms of the contract;
- Reasonably related to the lawsuit (i.e., the law to be applied is from a state with connections to the parties or the contract); and
- Not in violation of the public policy of the forum state or another interested state.
Approaches to Choice of Law Overview
Courts generally approach choice-of-law questions using one of three different approaches:
(1) The vested-rights approach of the Restatement (First) of Conflict of Laws;
(2) The most-significant-relationship approach of the Restatement (Second) of Conflict of Laws and
(3) The governmental-interest approach.
*A state may use different choice-of-law approaches for different substantive areas of the law.
Vested-Rights Approach
Looks to the jurisdiction where the parties’ rights are vested - where the
act or relationship that gives rise to the cause of action occurred/was created.
Generally, this approach looks for the location where the last liable event took place.
In determining where vesting occurred, the forum court will first characterize the issues in the cause of action. Initially, this involves a determination of whether the issue is substantive or procedural.
- If the issue is procedural, then the forum court will apply its own procedural rules.
- If the issue is substantive, then the court must identify the substantive area of the law involved.
After characterizing the issue in the cause of action, the forum court will then determine what the forum state’s choice-of-law rules require with regard to the characterized issue.
For example, if the issue has been characterized as a substantive tort issue, then the law of the forum state may require that the law of the place of the injury apply.
Most-Significant-Relationship Approach
The Restatement (Second) of Conflict of Laws applies the law of the state with the most significant relationship to the issue in question.
When determining which state has the most significant relationship, the forum court generally considers the contacts that link each jurisdiction to the case, as well as the seven policy principles that are set forth in the Restatement (Second) of Conflict of Laws
*R2 includes specific presumptive rules for several different substantive areas of the law discussed below.
Governmental-Interest Approach
Under the governmental-interest approach, it is presumed that the forum state will apply its own law, but the parties may request that another state’s law be applied.
If a party makes such a request, then that party must identify the policies of competing laws.
If there is a false conflict (i.e., the forum has no interest in the litigation), then the court applies the law of the state that does have an interest in the case.
If there is a true conflict (i.e., the
forum state and another state both have an interest in the litigation), then the forum state will review its own policies to determine which law should apply. If the conflict cannot be resolved, then the law of the forum state is applied.
Conflict-of-Laws Rules in Federal Diversity Cases
In federal diversity cases, the federal district court is generally required to apply the conflict-of-laws rules of the state in which it sits.
However, if a diversity case was transferred under federal venue law from a federal court in one state to a federal court in a different state, then the first state’s choice-of-law rules will be applied.
Rules for Specific Areas of Substantive Law Overview
-torts
-contracts
-property
-inheritance
-family law
Torts
(1) Vested-rights approach:
a tort case will be governed by the law of the place where the wrong was committed. This means the place where the last event necessary to make the actor liable for the tort took place (generally the place where the person or thing that is injured is situated at the time of the wrong).
(2) Most-significant-relationship approach:
the court considers four important contacts: (i) the place of the injury, (ii) the place where conduct causing injury occurred, (iii) the domicile, residence, place of incorporation, or place of business of the parties, and (iv) the place where the relationship is centered.
(3) Governmental-interest approach:
the forum state generally looks to its own law, so long as that state has a legitimate interest in applying its own law.
Contracts
(1) Express choice of law of the parties:
If there is an express choice-of-law provision in the contract, then that law will govern unless:
- It is contrary to public policy;
- There is no reasonable basis for the parties’ choice; or
- There was fraud or mistake and true consent was not given.
(2) Vested-rights approach:
The law of the place where the contract is executed will apply to the following issues:
- Validity of the contract;
- Defenses to formation of the contract; and
- Interpretation of the contract.
The law of the location where the contract was to be performed will apply to:
- Details of performance such as time and manner of performance;
- The person who is obligated to perform and the person to whom performance is to be made;
- Sufficiency of performance; and
- Excuses for non-performance.
(3) Most-significant-relationship approach
the following factors are considered, in addition to the seven policy factors:
- The location of the contracting, negotiation, and performance;
- The place where the contract’s subject matter is located; and
- The location of the parties’ domiciles, residences, nationalities, places of incorporation, and places of business.
Generally, when the location of negotiation and performance are the same, the forum court will apply the law of that state.
(4) Default Rules:
These default rules will apply unless another state is found to have a more significant relationship with regard to the issue.
- Land contracts are controlled by the law of the state of the situs (location) of the land.
- Personal property contracts are controlled by the law of the state where the place of delivery is located.
Property
(1) Tangible personal property:
The UCC generally governs most issues involving the sale of (or security interests in) tangible personal property. Under the UCC, the parties may stipulate to the applicable law that will govern the transaction or, in the absence of such stipulation, the forum state will apply its version of the UCC “to transactions bearing an appropriate relation to” the forum state.
- Secured Transactions: Under the UCC, the law governing the perfection, nonperfection, and priority of security interests in tangible and intangible collateral is generally the law of the state in which the debtor is located.
(2) Transactions not covered by the UCC:
(A) Vested-rights approach:
The creation and transfer of interests in tangible personal property are governed by the law of the state in which the property was located at the time of the transaction at issue. This rule controls even when the property at issue may have been taken to another state without the permission of the owner.
(B) Most-significant-relationship approach:
The law of the situs (location) of the
tangible personal property at the time that the relevant transaction took place generally determines the choice of law. However, if it is determined that another state has a more significant relationship to the transaction, then that state’s law will apply.
(3) Real Property:
(A) Vested-rights approach:
The law of the situs of the real property governs legal issues concerning the title and disposition of real property and whether any interests in the property can be gained or lost. The forum state will refer to the law of the situs state even with regard to the choice-of-law rules.
(B) Most-significant-relationship approach:
The law of the situs of the real
property is generally presumed to be most significant.
Inheritance
There are many questions that may arise when determining the law that governs inheritance. These questions include the validity of the will, the rights of nonmarital or adopted children to inherit property, and the marital rights of the surviving spouse.
(1) Personal Property
Questions regarding the validity of a decedent’s will regarding personal property and the transfer of personal property from someone who dies intestate or who has a will are
governed by the law of the deceased’s domicile at the time of death.
(2) Real property
Questions regarding the validity of a decedent’s will regarding real property and the transfer of real property from someone who dies intestate or who has a will are governed by the law of the situs.
Family Law
Marriages are valid where they took place and are recognized in all other states. If a marriage violates a particularly strong public policy of the domicile of either party, however, it will be invalid. Such policies can include bigamy and incest.
E.g. A common law marriage that is valid where contracted is also valid
in a state that does not permit common law marriage unless it violates a strong public policy of the domicile of either party.
(1) Divorce and marital property
Questions of law relating to the grounds for divorce are controlled by the law of the plaintiff’s domicile in a divorce matter.
In determining the enforceability of a premarital agreement:
- Most states apply the law of the state with the most significant relationship to the matter at hand.
- Some states apply the law of the state in which the premarital agreement was executed.
