Raising Choice-of-Law Provision in Your Contract
It’s not uncommon for contracts to include a choice-of -law provision that specifies that a specific state’s law governs the agreement. For instance, even though the transaction is in Florida, the agreement may specify that another state’s law applies. Typically, the reason for this is that the other party is based in that state and the agreement was drafted based on that state’s legal framework. So, if a dispute arises, or the agreement needs to be enforced, it is the state’s law subject to the choice-of-law provision governing the dispute.
What if a dispute was filed in Florida and another state’s law governs the agreement? “When a party seeks to rely on a choice-of-law provision in a contract, it generally must raise the claim in a pleading.” Engelin v. Portfolio Recovery Associates, LLC, 50 Fla.L.Weekly D1722b (Fla. 2d DCA 2025). “Further, “a party waives its opportunity to rely on non-forum law where it fails to timely provide — typically in its complaint or the first motion or response when choice-of-law matters — the sources of non-forum law on which it seeks to rely.’” Id. (citation omitted). In other words, if you don’t timely raise it, you waive it.
In Engelin, a plaintiff that wanted to rely on Virginia law to avoid an attorney’s fee ruling against it never raised the contention that Virginia law applied until it was too late; thus, the application of Virginia law was deemed waived.
[The plaintiff] did not argue that Virginia law applied when it responded to [the defendant/counter-claimant’s] pleadings in a fourteen-page Motion to Strike, or in the Alternative, Motion for Partial Summary Judgment, on Defendant’s Claim for Entitlement to Prevailing Party Attorney’s Fees. In fact, it did not mention Virginia law or the choice-of-law provision. Instead, [the plaintiff] specifically relied on Florida law in its response and in its answer and affirmative defenses to [the defendant/counterclaimant’s] counterclaim. [The plaintiff] failed to plead or prove that Virginia law applied when it had opportunities to do so well before the case was dismissed and when it was clear that [the defendant/counterclaimant] was relying on Florida law as dispositive concerning fees. Thus, we conclude that [the plaintiff] waived its opportunity to rely on Virginia law.
Engelin, supra.
If you are dealing with a choice-of-law provision and plan to rely on that state’s law, raise it. Don’t ignore it until it’s too late!
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
