Choice of Law Questions in California

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Something You May Not Think About When Choosing Another State's Law

California courts generally will apply Section 187 of the Restatement Second of Conflicts of Laws when deciding choice of law questions.  Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 465 (1992).  Until now, it hasn't been known whether a California court will follow Section 207 which provides "The measure of recovery for a breach of contract is determined by the local law of the state selected by application of the rules".  

In Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc., 2020 Cal. App. LEXIS 559, the defendant challenged an award of prejudgment interest that arguably was not available under California law.  The contract at issue included a New York choice of law provision and the applicable New York statute mandates the recovery of prejudgment interest because of a breach of performance under a contract.  The Court of Appeal applied Section 207 and affirmed the judgment of prejudgment interest.  

© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume X, Number 174


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Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...