Conflict of laws and private international law (2022): Conflict of laws in the United States

Conflict of laws in the United States is the field of procedural law dealing with choice of law rules when a legal action implicates the substantive laws of more than one jurisdiction and a court must determine which law is most appropriate to resolve the action. In the United States, the rules governing these matters have diverged from the traditional rules applied internationally. The outcome of this process may require a court in one jurisdiction to apply the law of a different jurisdiction.

New approaches in the United States.

Until the 20th century, traditional choice of law rules were based on the principle that legal rights vest automatically at legally significant and ascertainable times and places. For example, a dispute regarding property would be decided by the law of the place the property was located. Disputes in tort would be decided by the place where the injury occurred.

During the first half of the 20th century, the traditional conflict of laws approach came under criticism from some members of the U.S. legal community who saw it as rigid and arbitrary; the traditional method sometimes forced application of the laws of a state with no connection to either party, except that a tort or contract claim arose between the parties in that state. This period of intellectual ferment (which coincided with the rise of the legal realism movement) gave birth to a number of innovative new approaches.

Renvoi.

Courts may look for a provision in the law of the choice of law state that permits the court to use the lex fori, for example law of the forum state. For example, suppose State X has a rule that says that if property located in State X is conveyed by a contract entered into in any other state, then the law of that other state will govern the validity of the contract. Suppose also that State Y has a rule that says that if a contract entered into in State Y conveys property located in any other state, then the law of that other state will govern the validity of the contract. Now suppose that party A conveys land located in State X to party B through a contract entered into in State Y. If a lawsuit arising from that transaction is brought in State X, the law of State X requires the courts of that state to apply the law of the state where the contract was made, which is state Y. However, the courts of State X might note that a court in State Y would apply the law of State X, because that is where the land is located, and the law of State Y follows the land.

Most U.S. states frown upon renvoi in a choice of law situation. In this example, they would insist that the only law the courts of State X should look at is the law of contracts of State Y, not the "whole law" of State Y, which includes that state's law governing choice of law. The basic criticism of renvoi is that it can lead to an endless circle. In the above example, it could be argued that if the law of State Y points back to State X, then the law of State X would only once again require application of the law of State Y, and so forth and so on without end.

Significant contacts test.

The significant contacts test evaluates the contacts between the states and each party to the case, and determines which state has the most significant contacts with the litigation as a whole. This test has been criticized for failing to respect the sovereignty of the state in which the cause of action arose, and because courts can tip the balance in one way or another in deciding which contacts are significant.