A court can apply the laws of another jurisdiction if requested by a party, causing a choice-of-law problem. The choice of law can affect the outcome of a case, and contracts often include a choice of law clause to avoid conflicts.
A lawsuit can be filed in one jurisdiction, and the court located in that jurisdiction can apply the laws of another jurisdiction to the issues at hand. This normally occurs when one of the parties formally requests the judge to apply the laws of the other jurisdiction. If the other party disagrees with this request, the court in which the lawsuit was filed must choose which law will govern the case. The process of deciding which law will apply to the case is called choosing the law.
Choice-of-law problems normally arise when multiple jurisdictions have some kind of connection to a case, and the laws of each of those jurisdictions could ultimately produce a different outcome in the case. Before the case is adjudicated, it must be decided which law of the jurisdiction will govern each matter at hand. The conflicting laws in question may be local, state or provincial laws, as well as federal or national laws. It can also be the laws of different countries. Determining which law to apply is generally regarded as procedural in nature, and a judge rather than a jury usually decides matters relating to choice of law.
The choice of law used to govern a case can make a big difference in how the case is handled. For example, jurisdictions often have different statutes of limitation, which state the length of time a party must bring a suit, for the same type of civil damage. This means that a party may be barred from bringing a lawsuit in a jurisdiction if the statute of limitations has expired. The party could, however, take the lawsuit to another jurisdiction with a longer statute of limitations as long as that jurisdiction is deemed an acceptable choice of law.
In addition to statute of limitations, the choice of law can affect a number of other potentially significant areas of a case. These areas are generally of a substantive nature, meaning they determine the legal rights and duties of the parties. Conversely, the choice of law generally does not affect procedural laws, which are the rules relating to the conduct of the trial. The court in which you are adjudicating your case will generally apply its own rules of procedure as opposed to the rules of procedure of another jurisdiction.
In order to avoid a conflict of laws, legal contracts often include a choice of law clause. These clauses specify exactly which law of the jurisdiction will apply in the event of a dispute between the parties. If the parties end up in litigation, the contract term will typically be upheld by the seised court.
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