When there is more than one state, or more than one jurisdiction (state court, federal court) with a significant relationship to the parties and circumstances involved in a lawsuit or dispute, the question may arise as to which state or jurisdiction’s laws will govern the lawsuit or dispute. The body of law that determines what law governs a dispute is called conflict of laws and consists of legal principles courts use to determine which state or jurisdiction’s law applies—unless the parties to a dispute have agreed (usually in a contract) on what law will apply.
In Texas, as in other states, when a lawsuit or dispute involves multiple jurisdictions, the determination of which law applies is governed by the principles of conflict of laws, also known as choice of law. Texas courts will analyze the case to identify the jurisdiction with the most significant relationship to the dispute. Factors considered may include the location where a contract was signed, where the performance or breach occurred, the domicile or residence of the parties, and where a tort was committed. Texas follows the Restatement (Second) of Conflict of Laws for guidance in many areas of choice of law. If the parties have a valid choice of law clause in their contract, Texas courts will generally honor that agreement, unless it contravenes a fundamental policy of a state with a materially greater interest in the issue. In cases where federal law may apply, such as those involving federal statutes or constitutional issues, federal courts will apply federal law. However, in diversity jurisdiction cases, where the parties are from different states, federal courts will apply the conflict of laws principles of the state in which they sit. It's important to note that in complex cases involving multiple jurisdictions, the analysis can be intricate and fact-specific, often requiring the expertise of an attorney to navigate the applicable laws.
