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O’Connor, Erin O’Hara; Ribstein, Larry E. --- "Conflict of Laws and Choice of Law" [2012] ELECD 93; in Sanchirico, William Chris (ed), "Procedural Law and Economics" (Edward Elgar Publishing, 2012)

Book Title: Procedural Law and Economics

Editor(s): Sanchirico, William Chris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847208248

Section: Chapter 5

Section Title: Conflict of Laws and Choice of Law

Author(s): O’Connor, Erin O’Hara; Ribstein, Larry E.

Number of pages: 31

Extract:

5 Conflict of laws and choice of law
Erin O'Hara O'Connor and Larry E. Ribstein


1. Introduction
When a legal dispute involves parties, property or events located in more
than one government jurisdiction, and the substantive laws of those juris-
dictions differ, whose substantive laws govern the rights and obligations of
the parties? As barriers to migration and trade between jurisdictions fall,
choice of law increasingly complicates transaction and litigation planning
and provides new opportunities for private ordering.
Until approximately fifty years ago, all courts in the United States
applied the territorial rules roughly embodied in the First Restatement of
Conflicts when they resolved inter-jurisdictional disputes. The rules, which
address most litigation subjects, are premised on a `vested rights' theory.
A party's rights vest, if at all, at a particular place and point in time. Only
that state has the power to create the rights relied on by the plaintiff (Beale,
1935; Brilmayer, 1995). Tort issues, for example, are governed by the
law of the `place of the wrong', which is defined for a variety of tortious
activities. Contract validity, necessary forms, and substantial perform-
ance issues are treated according to the law of the place of contracting,
while details of performance are governed by the place of performance.
Property issues are resolved according to the law of the situs of the prop-
erty (Restatement (First) Conflict of Laws, 1934). Accordingly, although
an interstate dispute is litigated in a Massachusetts court, the court might
apply the ...