Conflict of laws is a situation where two or more different laws are applicable to a case, and the outcome depends upon which law the court applies to resolve it.

Definition of Conflict of Laws

When two or more jurisdictions applicable to a case have different provisions pertaining to the issue in question, it results in conflict of laws. The outcome of the case in such a situation depends upon which jurisdiction's law the court chooses to apply. The conflict in rules can be between federal laws, state laws, and the laws of other countries.

The process through which the court determines which law to apply in a particular case is called characterization or classification.

A court usually has two choices in the case of conflicting laws:

  • Lex fori: A court may choose to apply the law of the forum. This is usually done in matters of procedural conflict.
  • Lex loci: A court may choose to apply the law of the place where the transaction took place. This is usually done when the matter is considerably more important.

Conflict of Laws Rules

In civil law, legal professionals often refer to conflict of laws as private international law. There are certain rules to be followed while resolving a dispute to which conflicting laws apply. A conflict usually arises only when there is a “foreign” element in a dispute. It happens due to diversity of laws of different municipalities, states, or countries.

Conflict of laws is all the more prominent in the United States since there are many states with their own set of laws. According to a Supreme Court ruling given in 1938, a federal court must apply the local conflict of laws rules of the state where the case is being heard.

Some provisions of the U.S. Constitution have the effect of restricting the procedural freedom of the states in deciding cases. Section 1 of Article 4, for instance, requires each state to give complete faith and credit to judicial proceedings of another state. The Supreme Court has interpreted this section to mean that each state must consider another state's judgment as valid, and it must use its powers to enforce the judgment.

However, there is an exception to this rule. The courts do not enforce claims arising out of another state's penal law.

The Sovereignty of a Nation

Every nation enjoys the sovereignty and jurisdiction in its territory. Hence, the laws of a country are applicable and binding to all the properties located in its territory, all the persons residing in that country (whether citizens or foreigners), and all the contracts made within that country.

However certain persons are exempted from the territorial jurisdiction of a nation's laws, especially the following two categories:

  • Ambassadors and representatives of other states staying as delegates in a foreign country
  • Member of a foreign army or fleet stationed in or passing through the territory of another country with friendly relations

A nation cannot bind by its laws the property situated out of its territory or persons not resident in its territory, even if they are citizens of that nation.

The extent of applicability and enforcement of one country's laws in another country depends upon the regulations and consent of the latter. If a country does not recognize a foreign law, then such law cannot have a binding effect within its territory.

When the laws of two countries conflict, the court deciding the case usually prefers the law of its own country.

The Nature of Conflicts Law

The conflicts law is not codified at the international level. However, international treaties often contain provisions to unify specific areas of substantive and conflicts laws. If a treaty contains uniform provisions of a substantive law, the substantive and conflicts laws of individual countries become irrelevant. On the other hand, if a treaty unifies conflicts law, the differences in the substantive law of individual countries continue to exist, but the unified provisions offer a way to bridge them.

There are very few conventions in the areas of substantive and conflicts laws, and the number of participating countries is very small. As a result, the interpretation of international treaties depends upon the courts of the participating countries.

However, Rome Convention (for contractual obligations) is a notable exception. It applies to all the European Union members, and the European Court of Justice has jurisdiction over it.

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