Everyone has seen it in their contracts and wondered what it means. It is always in the miscellaneous section at the end of agreements. It usually says something like, “without regard to the conflicts of law provisions therein.” The full text is “This Agreement shall be governed by the laws of the State of Texas, without regard to the conflicts of laws provisions therein.” Why is it included?
This provision is used to take interpretation of an agreement outside of the state law where a cause of action occurs. For instance, if you have an agreement with a company that is in California there could be a cause of action that arises in California. However, you want the laws of Texas to apply. You have added a “choice of law” provision for that very reason. Unfortunately, most states have a rule that says the law of the state where the cause of action arose governs that cause of action. This would mean that if the cause of action happened in California, even if you said you wanted Texas law to aply, Texas law would point back to California. By adding the "without regard to the conflicts of law provision" we are able to negate the Texas law that points back to California. that is why most choice of law provisions contain the described clause and you should think about verifying that your's does too.
Thank you, rather informative and helped me in a translation.
Posted by: CopperKettle | June 25, 2009 at 12:48 PM