law-choice-of-law | forum selection clause | arbitration agreements | forum non conveniens


A trial court's determination of choice of law is a question of law and is reviewed de novo. Cudd Pressure Control
v. Sonat Exploration, 202 S.W.3d 901, 904 (Tex. App.-Texarkana 2006), aff'd, 271 S.W.3d 228 (Tex. 2008). The
underlying principle is to protect the parties' expectations. Id. at 904. In that regard, the courts have repeatedly
recognized that the contracting parties frequently express their choice of law for the construction and
interpretation of their agreement. Id. The Texas Supreme Court has stated that judicial respect for the contracting
parties' choice of law advances the policy of protecting the parties' expectations. Id.

The parties' contractual choice of law will be given effect if the contract bears a reasonable relationship to the
chosen state and no countervailing public policy of the forum demands otherwise. Sava Gumarska Kemijska
Indus. D.T. v. Advanced Polymer Sci., Inc., 128 S.W.3d 304, 314 (Tex. App.-Dallas 2004, no pet.). The state in
which a company has its principal place of business has a reasonable relationship to the parties and the
transaction. My Café CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860, 865 (Tex. App.-Dallas 2003, no pet.).

Section 273.001 specifically states that it does not apply to the contract if Section 1.301 applies. Pursuant to
Section 1.301, the policy of the state of Texas is to allow parties to contract for the choice of law they want to
govern a contract insomuch as the transaction bears a reasonable relation to the chosen state. See TEX. BUS. &
COM. CODE ANN. § 1.301(a).

Texas law generally permits parties to resolve uncertainty as to which jurisdiction's laws will govern their
performance under a multi-jurisdictional contract by including a choice-of-law provision in the agreement. CMA I,
285 S.W.3d at 13-14 (citing Nexen, Inc. v. Gulf Interstate Eng'g Co., 224 S.W.3d 412, 419 (Tex. App.-Houston [1st
Dist.] 2006, no pet.); Chase Manhattan Bank, N.A. v. Greenbriar N. Section II, 835 S.W.2d 720, 723 (Tex. App.-
Houston [1st Dist.] 1992, no writ)). Where the parties' contract includes a choice-of-law provision that selects the
law of a jurisdiction bearing a substantial relationship to the parties or their transaction, the parties' contractual
obligations are governed by the law chosen by the parties unless
(1) there is a state with a more significant relationship to the transaction,
(2) applying the chosen law would contravene a fundamental policy of that state, and
(3) that state has a materially greater interest in the determination of the particular issue.
See DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677-78 (Tex. 1990) (citing RESTATEMENT (SECOND)
CONFLICT OF LAWS §§ 187(1)-(2), 188); Chesapeake Operating, Inc. v. Nabors Drilling USA, Inc., 94 S.W.3d
163, 169-70 & n.11 (Tex. App.-Houston [14th Dist.] 2002, no pet.) (same).

Choice of Law: Case remanded for application of Louisiana law
Sonat Exploration Co. v. Cudd Pressure Control, Inc.  No. 06-0979  (Tex. Nov. 21, 2008) (Brister)(choice of law
when contract not express,
enforceability of Rule 11 agreement, indemnity law and public policy of forum state vs.
foreign state)           
SONAT EXPLORATION COMPANY v. CUDD PRESSURE CONTROL, INC.; from Harrison County; 6th district (06-03-00077-CV, 202
SW3d 901, 09-26-06) 2 petitions        
The Court affirms the court of appeals' judgment.
Justice Brister delivered the opinion of the Court.

The objectives behind choice-of-law rules generally and the Restatement rules in particular “may best
be attained in multistate transactions by letting the parties choose the law to govern the validity of the
contract and the rights created thereby.”[17] But the parties must make that choice themselves. As the
parties here failed to choose one law for all purposes in Louisiana, we must determine the applicable
law on other grounds.

We do not hold today that Louisiana law should cover all indemnity disputes stemming from oilfield
accidents there. When a contract involves oilfield work in many states, sophisticated parties should
generally be free to designate the law that will govern their relationship and have that choice respected.
[41] But the parties here chose no law for Louisiana jobs, and included an additional-insured provision
that would have been superfluous had they expected their indemnities to be enforceable in such cases.
Because contracts should be governed by the law the parties had in mind when the contract was made,
[42] we hold in these circumstances that Louisiana law applies.

DOUGLAS K. BROCAIL v. DETROIT TIGERS, INC.; from Harris County; 14th district (14-06-00557-CV, 268 SW3d
90, 04-03-08) (foreign choice of law clause enforced)
In this case, a major league baseball player for the Detroit Tigers sued the Club for injuries to his pitching arm.  
The Club was granted summary judgment on the grounds, inter alia, that the player’s claims were barred by the
federal Labor-Management Relations Act, the Michigan Workers Disability Compensation Act, and Michigan’s
statute of frauds.  We affirm.

Text of section effective until April 01, 2009        


(a)  This section applies to a contract only if:        
(1)  the contract is for the sale, lease, exchange, or other disposition for value of goods for the price,
rental, or other consideration of $50,000 or less;        
(2)  any element of the execution of the contract occurred in this state and a party to the contract is:        
(A)  an individual resident of this state; or        
(B)  an association or corporation created under the laws of this state or having its principal place of
business in this state; and        
(3)  Section 1.301 of this code does not apply to the contract.        
(b)  If a contract to which this section applies contains a provision making the contract or any conflict
arising under the contract subject to the laws of another state, to litigation in the courts of another state,
or to arbitration in another state, the provisions must be set out conspicuously in print, type, or other form
of writing that is bold-faced, capitalized, underlined, or otherwise set out in such a manner that a
reasonable person against whom the provision may operate would notice. If the provision is not set out
as provided by this subsection, the provision is voidable by a party against whom it is sought to be
(c)  Repealed by Acts 1993, 73rd Leg., ch. 570, Sec. 16(4), eff. Sept. 1, 1993.        

Added by Acts 1987, 70th Leg., ch. 812, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg.,
ch. 622, Sec. 2, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 772, Sec. 1, eff. Sept. 1, 1989; Acts 1991,
72nd Leg., ch. 840, Sec. 1, eff. Aug. 26, 1991; Acts 1993, 73rd Leg., ch. 570, Sec. 14, 16(4), eff. Sept.
1, 1993.        
Amended by:         
Acts 2005, 79th Leg., Ch. 728, Sec. 2.001, eff. September 1, 2005.


Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711, 720 (Tex.App.-Dallas 2004, no pet.) (citing
Pittsburgh Corning Corp. v. Walters, 1 S.W.3d 759, 769 (Tex.App.-Corpus Christi 1999, pet. denied))
("[A] preliminary motion must be filed asking the court to apply another state's laws."); see also TEX.R.
EVID. 202 ("A court upon its own motion may, or upon the motion of a party shall, take judicial notice of
the constitutions, public statutes, rules, regulations, ordinances, court decisions, and common law of
every other state, territory, or jurisdiction of the United States.").