What Is Conflict of Laws?

What Is Conflict of Laws?

Understanding the Rules Used When More Than One Jurisdiction May Govern a Legal Dispute

Modern legal disputes do not always fit neatly within the boundaries of a single state or country. A person may live in one state, enter into a contract in another, perform the contract somewhere else, and become involved in litigation in yet another jurisdiction. A motor vehicle accident may involve a driver from one state, a victim from another, an insurance company incorporated elsewhere, and an accident that occurred across a state border. A marriage may be celebrated in one jurisdiction, a divorce sought in another, and property located in several different states.

These situations create a fundamental legal question:

Which jurisdiction’s law should apply?

That question lies at the heart of conflict of laws, sometimes called choice of law or, particularly in international contexts, private international law.

Cornell Legal Information Institute — Conflict of Laws (Wex) defines conflict of laws as a situation in which the laws of two or more jurisdictions have a connection to a case and the outcome may depend upon which jurisdiction’s law is applied. The potentially competing laws may come from different U.S. states, from federal law, or from foreign countries.

Conflict of laws therefore does not necessarily mean that two jurisdictions are literally fighting over a case. Rather, it describes the legal problem created when more than one legal system has a legitimate connection to the dispute.

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What Does “Conflict of Laws” Mean?

At its simplest, conflict of laws is the body of legal principles used to resolve disputes involving connections to multiple jurisdictions.

Suppose, for example, that a person who lives in Pennsylvania is injured in a traffic accident in New Jersey by a driver who lives in New York. The injured person files a lawsuit in Pennsylvania.

Several jurisdictions now have connections to the dispute:

• Pennsylvania is the plaintiff’s home state and the forum where the lawsuit was filed.
• New Jersey is the place where the accident occurred.
• New York is the defendant’s home state.
• The laws of these states may differ concerning negligence, comparative fault, damages, insurance, or other issues.

The court cannot simply assume that Pennsylvania law applies to every question merely because the lawsuit was filed in Pennsylvania.

Instead, it may have to determine which jurisdiction has the strongest or most legally relevant connection to each particular issue.

This is a choice-of-law problem.

The same problem can occur in contractual disputes, family law, property disputes, tort claims, employment relationships, insurance disputes, business transactions, inheritance matters, and many other areas of law.

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Why Does Conflict of Laws Exist?

Conflict of laws exists largely because legal systems are territorial.

The United States does not have one completely uniform body of substantive law governing every private legal relationship. Each state possesses its own legal system, including statutes, regulations, judicial decisions, and common-law doctrines.

Consequently, two states can legitimately adopt different rules concerning the same subject.

For example, one state might impose a particular limitation on damages while another state might permit a broader recovery. One state may recognize a particular contractual provision while another may restrict it. States may also differ regarding family relationships, property rights, statutes of limitation, tort liability, employment protections, and numerous other matters.

International disputes create even greater variation because different countries may have fundamentally different legal traditions, statutes, procedural systems, and rules concerning private rights.

Conflict of laws provides a framework for deciding which legal system should control when those systems potentially point in different directions.

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Conflict of Laws Is Not the Same as Jurisdiction

One of the most important distinctions in this field is the difference between jurisdiction and choice of law.

Jurisdiction asks:

Which court or legal authority has the power to hear the dispute?

Conflict of laws asks:

Which jurisdiction’s law should that court apply?

These questions are related but not identical.

A court may have jurisdiction over a case while ultimately applying the law of another jurisdiction.

For example, a court in State A may properly exercise jurisdiction over a dispute involving events that occurred in State B. The court in State A may nevertheless determine that State B’s substantive law governs the particular issue.

Therefore:

The place where a case is heard does not automatically determine the law that governs every issue in the case.

This distinction becomes particularly important in federal courts.

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The Forum: Where Is the Case Being Heard?

The jurisdiction in which a court hears a dispute is commonly called the forum.

The forum is important because the forum’s own conflict-of-laws rules may determine how the court approaches the choice-of-law question.

This creates an important analytical sequence.

A court may first ask:

1. Does this court have jurisdiction?
2. What jurisdiction’s conflict-of-laws rules apply?
3. Which jurisdictions have connections to the dispute?
4. What legal rules do those jurisdictions provide?
5. Which jurisdiction’s law governs the particular issue?

The answer may differ from one issue to another.

A single case can therefore involve the law of several jurisdictions without necessarily producing a contradiction.

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Substantive Law and Procedural Law

Another foundational distinction in conflict of laws concerns substantive law and procedural law.

Substantive law generally establishes legal rights, duties, liabilities, and legal consequences. Procedural law generally regulates the mechanisms through which courts enforce those rights and resolve disputes.

Traditionally, courts have often applied their own procedural rules while considering whether another jurisdiction’s substantive law should govern.

This distinction can become complicated because not every rule fits neatly into one category.

A rule that appears procedural in one context may substantially affect the parties’ rights in another. Courts may therefore have to examine the function and effect of the rule rather than relying solely upon its label.

Cornell’s Wex explanation of conflict of laws identifies this traditional distinction through the concepts of lex fori, the law of the forum, and lex loci, referring to the law associated with the place of the relevant transaction or occurrence.

The modern law of conflicts, however, has developed well beyond a simple rule that “the forum applies its own law” or “the place of the event controls.”

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What Is Choice of Law?

Choice of law is the process through which a court determines which jurisdiction’s substantive law should govern a particular legal issue.

The phrase is particularly important because a court is not necessarily choosing one jurisdiction’s entire legal system for the case.

Instead, it may determine the applicable law issue by issue.

Consider a hypothetical dispute involving a contract between a company in Delaware and a customer in California. The contract was negotiated electronically, signed while the parties were in different states, and performed partly in California and partly elsewhere.

The court might have to consider:

• which state’s contract law governs interpretation;
• which state’s law governs validity;
• which state’s law governs remedies;
• whether a contractual choice-of-law clause is enforceable;
• whether a particular issue is procedural or substantive; and
• whether a state’s public policy prevents application of another jurisdiction’s law.

Thus, conflict of laws is often less about selecting one jurisdiction for an entire lawsuit than about identifying the legally appropriate law for each disputed question.

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Why Can the Choice of Law Change the Outcome?

Choice of law matters because legal rules differ.

Imagine a lawsuit in which the plaintiff’s recovery would be substantial under the law of State A but considerably more limited under the law of State B.

If the court applies State A’s law, the plaintiff may prevail on a particular claim or recover substantial damages.

If the court applies State B’s law, the result may be dramatically different.

The choice of law can therefore affect:

• whether a claim exists;
• whether a defendant is liable;
• whether a defense is available;
• the amount of damages;
• whether a contract provision is enforceable;
• whether a marriage or divorce has particular legal consequences;
• whether property rights are recognized;
• whether a statute of limitations bars a claim; and
• what remedies a court may provide.

Conflict-of-laws analysis is therefore not merely technical. It can determine the practical outcome of litigation.

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Traditional Approaches to Conflict of Laws

American conflict-of-laws doctrine has developed through several different approaches.

Historically, courts often relied heavily upon territorial rules.

Under traditional approaches, the location of an event, property, transaction, or relationship could determine the applicable law.

Several familiar Latin expressions illustrate this territorial tradition.

Lex loci generally refers to the law of the place connected with the relevant event or transaction.

Lex loci delicti refers to the law of the place where a tort occurred.

Lex loci contractus refers traditionally to the law associated with the place where a contract was made.

Lex rei sitae refers to the law of the place where property is located, particularly in matters involving immovable property.

These rules provided courts with relatively clear connecting factors.

But territorial rules sometimes produced difficult results.

Modern relationships are not always geographically simple. Contracts may be negotiated in one jurisdiction, executed in another, performed across several jurisdictions, and litigated somewhere else. Online commerce has made geographical connections even more complicated.

As a result, American courts developed more flexible approaches.

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The Interest Analysis Approach

One important development in American conflict-of-laws jurisprudence was the interest analysis approach.

Rather than asking only where an event occurred, courts applying interest-analysis principles examine the policies and interests of the jurisdictions connected to the dispute.

The central question becomes something closer to:

Which jurisdiction has the stronger legitimate interest in having its law applied to this particular issue?

For example, a state may have a strong interest in protecting its residents, regulating conduct occurring within its territory, protecting local businesses, or enforcing policies embodied in its legislation.

Another state may have a competing interest.

The court may therefore examine the purposes behind the competing laws and the relationships between the jurisdictions and the dispute.

This development contributed to the broader transformation of American conflict-of-laws doctrine during the twentieth century.

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The Most Significant Relationship Approach

Another influential approach asks which jurisdiction has the most significant relationship to the particular issue and the parties.

This approach attempts to move beyond rigid territorial rules while retaining identifiable connecting factors.

A court may consider matters such as:

• the place where the injury occurred;
• the place where the conduct causing the injury occurred;
• the residence or domicile of the parties;
• the place where the relationship between the parties is centered;
• the place where a contract was negotiated or performed;
• the location of property;
• the interests and policies of the jurisdictions involved; and
• the justified expectations of the parties.

The precise methodology varies among jurisdictions.

There is therefore no single universal conflict-of-laws test that every American court applies in every case.

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Federal Courts and Conflict of Laws

Conflict of laws becomes especially interesting when a dispute is heard in federal court.

Federal courts operate within a federal constitutional and statutory structure, but many disputes heard by federal courts involve state-law claims.

A particularly important example arises when a federal court exercises diversity jurisdiction.

In diversity cases, the federal court may be required to apply state substantive law rather than simply applying federal substantive law to the dispute.

This creates a second-order question:

Which state’s law should the federal court apply?

The answer can depend upon the conflict-of-laws rules applicable to the federal court.

Consequently, federal conflict-of-laws analysis may involve both federal doctrine and state conflict-of-laws principles.

This is one reason that conflict of laws cannot be reduced to the simple proposition that “the law of the state where the court is located applies.”

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Conflict of Laws Between U.S. States

Interstate conflict of laws is particularly important in the United States because every state possesses its own legal system.

A dispute may therefore involve several states even though the entire controversy occurs within the United States.

Examples include:

Automobile accidents

A driver from one state may cause an accident in another state involving a resident of a third state.

Contracts

Businesses located in different states may enter into agreements that are negotiated, signed, and performed in different jurisdictions.

Employment

An employee may live in one state, work primarily in another, and have an employer incorporated elsewhere.

Family law

A marriage may occur in one state, the spouses may later move to another, and divorce proceedings may be filed somewhere else.

Property

Real property may be located in a state different from the residence of its owner.

Corporations and business organizations

A company may be incorporated in one state, headquartered in another, conduct business throughout the country, and become involved in litigation elsewhere.

Each of these situations can create questions about which state’s law should govern.

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Conflict of Laws and International Disputes

Conflict of laws also extends beyond the fifty states and the District of Columbia.

A dispute involving individuals, businesses, contracts, property, or conduct connected to different countries may raise questions of international choice of law.

For example, imagine a contract between a company in the United States and a company in Germany. The agreement is negotiated electronically, signed by representatives in different countries, performed in several locations, and contains no clear choice-of-law provision.

If a dispute arises, the court may need to determine:

• which court has jurisdiction;
• which country’s law governs the contract;
• whether the parties selected governing law;
• whether the selected law is enforceable;
• whether a foreign judgment should be recognized;
• whether foreign law must be proved in the proceeding; and
• whether mandatory public policies prevent application of the otherwise applicable foreign law.

International conflict-of-laws questions can therefore overlap with jurisdiction, recognition of judgments, treaties, and international legal principles.

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Choice-of-Law Clauses in Contracts

Parties can sometimes reduce uncertainty by specifying in their contract which law will govern their relationship.

A choice-of-law clause is a contractual provision identifying the law that the parties intend to govern their agreement.

For example, a contract might state that:

“This Agreement shall be governed by the laws of the State of New York.”

Such a provision is different from a forum-selection clause.

A choice-of-law clause answers:

Which law governs?

A forum-selection clause answers:

Where may or must the dispute be litigated?

The two provisions can appear together, but they perform different legal functions.

Courts frequently respect contractual choices of law, but the parties’ selection is not necessarily absolute. Its enforceability may depend upon the applicable conflict-of-laws rules, the relationship between the chosen jurisdiction and the transaction, mandatory statutory rules, public policy, and other circumstances.

Cornell’s Wex explains that a governing-law provision is a contractual choice-of-law provision specifying which law will apply if a dispute arises.

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Public Policy and the Application of Foreign Law

A difficult conflict-of-laws problem arises when one jurisdiction’s law would produce a result that another jurisdiction considers contrary to an important public policy.

A court may therefore be required to balance respect for another jurisdiction’s law against the forum’s own fundamental legal policies.

This does not mean that courts simply reject foreign law whenever they disagree with it.

Conflict of laws is based in part upon the recognition that another jurisdiction may have legitimate authority or interests concerning the dispute.

The challenge is determining when that respect must yield to the forum’s own fundamental policies.

This issue becomes particularly important where the competing legal rules concern subjects involving strong governmental interests.

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Conflict of Laws Is Not a Single Rule

One of the most important things to understand about this field is that conflict of laws is not one rule.

It is a collection of doctrines, methodologies, principles, and judicial approaches used to resolve multi-jurisdictional legal problems.

Different jurisdictions may follow different approaches.

Even within the same jurisdiction, different areas of law may be treated differently.

The rules applicable to:

• torts,
• contracts,
• real property,
• family law,
• inheritance,
• corporations,
• insurance,
• employment,
• procedural matters, and
• federal-state disputes

may not be identical.

Therefore, anyone analyzing a conflict-of-laws problem must first identify the type of legal issue involved.

Only then can the appropriate choice-of-law framework be determined.

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A Simple Example

Consider the following hypothetical.

Maria lives in New York. David lives in New Jersey. They enter into a contract concerning the sale of a valuable piece of property located in Connecticut. The contract is negotiated partly in New York and partly online. The agreement contains no choice-of-law provision.

A dispute later arises, and Maria files a lawsuit in New York.

Which law applies?

There is no automatic answer.

New York is connected to Maria and to the litigation.

New Jersey is connected to David.

Connecticut is connected to the property and potentially to the transaction itself.

The court must determine which jurisdiction’s law governs the particular issue.

The answer could depend upon the nature of the dispute. If the controversy concerns rights in real property, the property’s location may be especially important. If it concerns contractual obligations, other connecting factors may become significant.

This illustrates a fundamental principle:

The legally relevant connection depends upon the legal issue being decided.

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The Role of Connecting Factors

Conflict-of-laws analysis frequently relies upon connecting factors.

A connecting factor is a fact linking a dispute to a particular jurisdiction.

Common connecting factors include:

• domicile;
• residence;
• citizenship;
• place of incorporation;
• principal place of business;
• place of contracting;
• place of performance;
• place of injury;
• place where conduct occurred;
• location of property;
• place where a relationship is centered; and
• the parties’ express contractual choice of law.

No single connecting factor automatically controls every dispute.

Instead, courts evaluate the factors that are legally significant under the applicable conflict-of-laws methodology.

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Why Conflict of Laws Matters in Everyday Life

Conflict of laws may sound like a specialized subject reserved for multinational corporations and international litigation.

In reality, interstate conflicts can arise in ordinary personal and commercial life.

People routinely:

• move between states;
• purchase goods from businesses located elsewhere;
• work remotely across state lines;
• enter online contracts;
• own property in multiple jurisdictions;
• marry or divorce after relocating;
• operate businesses across state borders; and
• travel between jurisdictions.

The more geographically interconnected society becomes, the more frequently legal relationships cross jurisdictional boundaries.

Digital commerce has made this especially apparent. A person can purchase a product from a company thousands of miles away without ever physically entering the company’s state. A software agreement can involve parties located in several countries. An online service can operate from one jurisdiction while serving customers throughout the world.

Conflict-of-laws doctrine provides the legal machinery for dealing with these relationships.

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The Central Question: Which Law Has the Strongest Claim to Govern?

Ultimately, conflict of laws is concerned with a deceptively simple question:

Which legal system should govern this particular dispute or legal issue?

The answer requires more than identifying where the lawsuit was filed.

A court may have to examine the jurisdictions connected to the dispute, the nature of the legal issue, the policies behind competing laws, the parties’ expectations, statutory requirements, constitutional limitations, contractual choices, and the particular conflict-of-laws methodology adopted by the relevant jurisdiction.

That is why conflict of laws occupies an important position between several areas of legal doctrine.

It touches jurisdiction, because courts must determine their authority to hear disputes.

It touches civil procedure, because the forum and procedural rules affect how litigation proceeds.

It touches substantive law, because the applicable legal rules may determine the parties’ rights and liabilities.

It touches constitutional law, because the legal authority of states and the federal government limits how jurisdictions may regulate matters extending beyond their borders.

And it touches international law, particularly when the competing jurisdictions belong to different countries.

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Key Takeaways

• Conflict of laws concerns legal disputes connected to more than one jurisdiction.
• The central question is often which jurisdiction’s law should apply.
• Jurisdiction determines whether a court has authority to hear a dispute; choice of law determines which law should govern the dispute or a particular issue.
• The jurisdiction in which a case is heard is called the forum.
• Courts frequently distinguish between substantive law and procedural law when conducting conflict-of-laws analysis.
• Traditional approaches relied heavily upon territorial principles such as the place where an event occurred.
• Modern approaches may consider governmental interests, significant relationships, party expectations, and other connecting factors.
• Federal courts may encounter complex conflict-of-laws questions when adjudicating state-law disputes.
• A contractual choice-of-law clause can specify the law the parties intend to govern their relationship, subject to applicable limitations.
• A forum-selection clause and a choice-of-law clause are different: one concerns the place of litigation, while the other concerns the governing law.
• Conflict of laws can arise between U.S. states as well as between the United States and foreign countries.
• The applicable methodology can vary depending on the jurisdiction and the type of legal issue involved.

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Frequently Asked Questions

Is conflict of laws the same as international law?

No. Conflict of laws can involve international disputes, but it is not the same as public international law. Conflict of laws primarily concerns private legal relationships involving multiple jurisdictions and the determination of which jurisdiction’s law should apply.

Does the law of the state where a lawsuit is filed automatically apply?

No. The forum’s law may govern some matters, particularly procedural questions, but the forum may determine that another jurisdiction’s substantive law governs a particular issue.

What is a choice-of-law rule?

A choice-of-law rule is a legal principle used to determine which jurisdiction’s law should govern a particular legal issue.

Can a contract choose which state’s law applies?

Often, yes. Parties may include a choice-of-law provision specifying the governing law. Courts generally give significant consideration to such provisions, although their enforceability can depend upon the applicable law and circumstances.

Is a choice-of-law clause the same as a forum-selection clause?

No. A choice-of-law clause identifies the governing law. A forum-selection clause identifies the court or jurisdiction in which litigation should occur.

Why can different states apply different laws to similar cases?

The United States is composed of multiple sovereign jurisdictions with their own legislation and common-law traditions. States may therefore adopt different legal rules reflecting different policies and priorities.

Can one court apply another state’s law?

Yes. A court may apply the law of another jurisdiction when the applicable conflict-of-laws rules determine that the other jurisdiction’s law governs the issue.

Why is conflict of laws important?

Because the applicable law can materially affect whether a party has a claim or defense, whether conduct creates liability, how a contract is interpreted, what damages are available, and what legal rights the parties possess.

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Conclusion

Conflict of laws is ultimately the law of legal relationships that cross boundaries.

Its importance comes from a simple fact: modern legal life rarely remains confined to one geographical jurisdiction. Individuals move, businesses operate across state lines, contracts are performed in multiple places, property is held in different jurisdictions, and digital transactions can connect parties who never meet physically.

When more than one jurisdiction has a legitimate connection to a dispute, the court must determine which legal system should govern.

That process is conflict of laws.

Understanding the subject therefore begins with recognizing the distinction between where a case is heard and which law governs it. From that foundation, the more specialized doctrines of choice of law, jurisdiction, recognition of judgments, interstate conflicts, federal-state conflicts, and international conflicts can be understood as different parts of the same larger problem:

How should a legal system resolve a dispute when the boundaries of more than one legal system intersect?