Duhaime's Law Dictionary


Choice of Law Clause Definition:

A term of a contract which sets the jurisdiction for dispute resolution, or the applicable law, in the event of any dispute between the conrtracting parties.

Related Terms: Attorn or Attornment

In Scotiabank, Justice Pieras adopted these words:

"A choice of law clause is a contractual provision wherein the parties designate the state whose law will govern disputes arising out of their agreement.

"Due to the difficulties that oftentimes arise in the determination of which state's law should govern a contract, parties often agree beforehand between themselves in order to prevent later conflict. Modern conflict-of-laws theories accept the parties' choice as the primary determinant of which law governs a contract."

An example, would be the terms of use of Facebook circa October 2010:

"You will resolve any claim, cause of action or dispute ... you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims."

REFERENCES:

  • Scotiabank De Puerto Rico v. Residential Partners, 350 F. Supp. 2d 334 (United States District Court, D. Puerto Rico, 2004)

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