Contract law (Dunno which law to apply)?

by state i mean US state.(this question apply to US only)

If assuming that the parties from different states entered into a contract, what aspects of the relationship would be most important in determining personal jurisdiction over an out-of-state party if a lawsuit was filed claiming breach of contract?

which state law shall it apply to the person who breach it?


Somebody help me

3 Answers

  • 1 decade ago
    Favorite Answer

    A) You can't get into federal court unless the aggregate claims are more than $75,000. If you have claims that high, you should have had a clause in the contract stating what state's courts have jurisdiction (these clauses have usually been upheld, assuming one party has minimum contacts (International Shoe Test) with that jurisdiction).

    B) The best forum would be the jurisdiction where the contract was signed, though other forums may have jurisdiction to hear the case if International Shoe is met.

    C) If the contract does not have a clause stating that a certain jurisdiction's law will apply, then...crap, I got an A in CivPro, but that was a while ago... Oh, I just re-read the question. As to personal jurisdiction, all you need is either minimum contacts (International Shoe), domicile, or 'tag' service. As to what law will apply, I found some notes, so you can see for yourself:

    McGee v. International Life Insurance Co. – If the contact between the defendant and the state of California is minimal, such contact must be closely related to the claim in order for the state of California to have jurisdiction. In other cases, we’ve heard a lot about the defendant’s interest, but in this case we hear a lot more about the plaintiff’s interest and the state’s interest. Stevie Y. describes McGee as the “outer extreme” of jurisdictional aggressiveness.

    Hanson v. Denckla – Are there sufficient contacts between the defendant and the forum for the state to have specific jurisdiction? If there are only minimal contacts between a state and a defendant, then the contacts must be closely related to the claim. Mere contracting is not enough to establish personal jurisdiction. There must be more in the way of contacts. As we move beyond McGee and Hanson, we’ll see the Court sort of back off from having such limited contacts constitute jurisdiction. Justice Warren suggests that the defendant must act to “purposefully avail” himself of the “privilege of conducting activities within that state”.

    Is this “stuff”, the transacting of business and sending of money between the Delaware trustee and the now dead lady in Florida sufficient to establish minimum contacts? The Court concludes that it is not enough. The Court concludes there is no personal jurisdiction in Florida over the Delaware trustee. The Court applies the minimum contacts test just like in McGee.

    World-Wide Volkswagen Corp. v. Woodson – Can a state court exercise in personam jurisdiction over a nonresident corporation when the only connection between the defendants and the forum is that one of their products ended up in the forum state? In order for a state court to exercise in personam jurisdiction over a defendant, there must exist minimum contacts between the defendant, forum, and claim. The key to the case: Does the test of minimum contacts a one-part test or a two-part test?

    Justice White says that the main functions of the Shoe test are (1) to protect the defendant against having to litigate in far-off lands and (2) to keep the states’ power in line. The first function is known as the “convenience” prong of Shoe. The second function is known as the “sovereignty” prong.

    The five fair play factors

    Asahi Metal Industry Co. v. Superior Court – Asahi is the case that makes the five factor test law. In World-Wide, it’s only dicta. On an exam, know and go through all five prongs. However, the big three are the first three, where the defendant’s burden is primary. (1) Burden on the defendant – burdens on corporate defendants tend to be diluted as compared to burdens on individual defendants. (2) The state’s interest – what interests does the forum have in having that litigation in that state as far as protecting its citizens and corporations? (3) The plaintiff’s interest – everyone would prefer to sue in their own forum. (4) Interstate efficiency interest – is this forum better, more efficient, more expedient, or cheaper than any other forum? It is rare that jurisdiction in a case turns on efficiency, because it can usually be argued both ways. (5) Interstate policy interest – this would be a stretch. The Courts of Appeals these days tend to lump this and efficiency together.

    Note that these factors have nothing to do with minimum contacts, but rather with “traditional notions of fair play & substantial justice”. Justice White implies that “minimum contacts” is the threshold, and thus if you don’t have contacts, you never get to fair play. But what do we need in terms of contacts to meet the threshold? The court never gives us a clear definition of “minimum contacts”.

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  • Anonymous
    1 decade ago

    It should depend on the amount of money and what commerce law the contract is in. If it's federal commerce then it could be in Federal court. But if you simple ordered something from another state online, then it should be conducting "business in your State". If it was a few million dollars transaction, then it could go into the Federal courts in your State. It would apply to the plaintiffs' State. The defendant would hire a lawyer in your State. However, if it is real estate then you would need to file in the State of the Real Estate as look as it doesn't move.

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  • 1 decade ago

    which ever state the criminal act or breach of contract occured in is where you should file

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