Understanding Florida's Default Choice of Law Rules through the Lex Loci Contractus Doctrine

The lex loci contractus doctrine, Latin for the “law of the place where the contract is made”,[i] provides that an agreement is governed by the place of its execution.[ii] In other words, the substantive law governing the validity, enforceability, and interpretation of a contract depends on the jurisdiction where the contract is executed.[iii] For example, if a contract is executed in Georgia, the substantive laws of Georgia apply, and a Florida court will apply Georgia law in interpreting or enforcing the agreement.[iv] If a contract is executed in New York, the substantive laws of New York apply, and a Florida court will apply New York law in interpreting or enforcing the agreement.[v]

           The practitioner can avoid the application of the lex loci contractus doctrine if he or she includes a valid choice of law provision within the parties’ agreement. If a choice of law provision is included within the parties’ agreement, the lex loci contractus doctrine does not apply, unless the choice of law provision is ruled unenforceable.[vi] Contracting parties can agree to be governed by any state’s jurisdiction within an agreement.[vii] If the parties agree to be bound by the substantive law of another state by means of a choice of law provision, the choice of law provision is presumptively valid and will generally be upheld.[viii] Where the parties agree to a chosen forum’s governing law within their agreement, the actual place of execution or counter-execution bears little to no significance. Instead, this potential contractual conflict of laws issue typically arises because of poor draftsmanship and can generally be avoided. Leaving this provision out of the agreement raises the small yet distinct possibility of potentially dragging the client into an unnecessary jurisdictional quagmire. A choice of law provision should be included in every agreement, and the attorney will usually avoid working through an arduous and unnecessary conflict of laws issue if he or she includes a choice of law provision within the parties’ contract.

           It is important to recognize, however, that a choice of law provision is conceptually separate from a chosen forum or venue clause in a contract. It is possible for the parties to agree to a venue in one county in State “A” but apply the laws from State “B”. For example, it is not uncommon for a state court in Florida to apply New York law to a case where New York law applies, even though the forum or venue is located in Florida, not New York. Typically, the venue and choice of law provisions are bundled together as part of one contractual provision near the tail-end of the contract, but it is always important to read and understand these “boilerplate” provisions to ensure that both venue and the choice-of-law have been adequately dealt with and resolved. Just because a contract includes a specific venue clause does not mean that the venue clause, standing alone, has resolved the choice of laws issue, and if a contract without a choice of laws provision is executed in another state, your client could be looking at the possibility of litigating the case in one venue, which was negotiated, while applying the laws of a completely different jurisdiction to the contract or to the entire case as a result, which was not negotiated.

           However, if the client signed an agreement without a choice of law provision, or if the attorney finds themselves in the infrequent circumstance where the governing law provision contravenes a strongly held public policy of the State of Florida, then the attorney will need to determine whether the lex loci contractus doctrine applies to the parties’ agreement, and if so, how it applies. Most of the readily available examples of the appellate courts’ application of the lex loci contractus doctrine stem from various insurance disputes.[ix] While at first it may appear, from the availability of examples, that the doctrine only applies to insurance agreements, Florida courts have also applied the lex loci contractus doctrine to lease agreements,[x] the purchase and sale of goods,[xi] separation agreements,[xii] antenuptial agreements,[xiii] and even security agreements and promissory notes as well. However, the lex loci contractus doctrine does not apply in some circumstances, including but not limited to, when a statute modifies or abrogates its applicability, to agreements for the performance of services, or to decisions involving real property.[xiv]  

           In conclusion, attorneys should ensure each contract they draft includes a choice of laws provision, which specifies, in writing, the body of substantive law which will apply based on the jurisdiction specified. This can be done in addition to a choice of venue provision, but the two are conceptually separate and should be treated as such. If a contract does not include a choice of law provision, or if the choice of law provision is unenforceable, then the attorney must determine whether the contract is one where the lex loci contractus doctrine applies. If the lex loci contractus doctrine applies to the particular type of contract, then the attorney must determine where the contract was last executed, or counter executed. If the contract’s last place of acceptance and execution is located in another jurisdiction, then, if the attorney is not barred to practice in that jurisdiction, the attorney should contact counsel barred in that jurisdiction to review the contract and assist with any issues concerning interpretation or enforcement, and the attorney should contact the client to discuss and strategize accordingly.

[i] Lex Loci, Black’s Law Dictionary (10th ed. 2014), available at Westlaw BLACKS.

[ii] E.g., Rando v. Government Employees Ins. Co., 39 So.3d 244, 247 (Fla. 2010) (citing State Farm Mut. Auto. Ins. Co. v. Roach, 945 So.2d 1160, 1163 (Fla. 2006)); Lumbermens Mut. Cas. Co. v. August, 530 So.2d 293, 295 (Fla. 1988) (citing Sturiano v. Brooks, 523 So.2d 1126, 1129 (Fla. 1988); accord, State Farm Mut. Auto Ins. Co. v. Duckworth, 648 F.3d 1216, 1218 (11th Cir. 2011); American United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1059 (11th Cir. 2007); Prime Ins. Syndicate, Inc. v. B.J. Handley Trucking, Inc., 363 F.3d 1089, 1091 (11th Cir. 2004).

[iii] E.g., Goodman v. Olsen, 305 So.2d 753, 754-755 (Fla. 1974); Trafalgar Developers, Ltd. v. Geneva Inv. Ltd., 285 So.2d 593, 597 at fn. 1 (Fla. 1973); accord, Berrios v. Orlando Regional Healthcare System, 100 So.3d 128, 130 (Fla. 5th DCA 2012).

[iv] Berrios v. Orlando Regional Healthcare System, 100 So.3d 128, 129-131 (Fla. 5th DCA 2012).

[v] Sturiano v. Brooks, 523 So.2d 1126, 1129-1130 (Fla. 1988).

[vi] For example, if the choice of law provision somehow violated public policy or was unconscionable, then it could be struck by a court as unenforceable.

[vii] Ware Else, Inc. v. Ofstein, 856 So.2d 1079, 1081 (citing Quinones v. Swiss Bank Corp., 509 So.2d 273 (Fla. 1987)).

[viii] Southeast Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So.3d 73, 80 (Fla. 2012) (citing Mazzoni Farms, Inc. v. E.I. DuPont De Nemours Co., 761 So.2d 306, 311 (Fla. 2000)). “The countervailing public policy must be of sufficient importance and rise above the level of routine policy considerations to warrant invalidation of a party’s choice to be bound by the substantive law of another state.” 82 So.3d at 80 (citing 761 So.2d at 312).

[ix] Rando v. Government Employees Ins. Co., 39 So.3d 244 (Fla. 2010); State Farm Mut. Auto. Ins. Co. v. Roach, 945 So.2d 1160 (Fla. 2006);

[x] Regal Shoe Shops v. Kleinman, 361 So.2d 765 (Fla. 3d DCA 1978).

[xi] Boat Town U.S.A., Inc. v. Mercury Marine Division of Brunswick Corp., 364 So.2d 15 (Fla. 4th DCA 1978).

[xii] See Scott v. Scott, 61 So.2d 324, 325 (Fla. 1952) (applying Pennsylvania law to a separation agreement executed in Pennsylvania); Hagen v. Viney, 169 So. 391, 394 (Fla. 1936); Blitz v. Dept. of Rev. ex rel. Maxwell, 898 So.2d 121, 125 (Fla. 4th DCA 2005) (applying New Jersey law to property settlement agreement issued in New Jersey to determine whether the New York choice of law provision was enforceable). 

[xiii] In re Estate of Nicole Santos, 648 So.2d 277, 280 (Fla. 4th DCA 1995); Nahar v. Nahar, 656 So.2d 225, 230 at fn. 10 (Fla. 3d DCA 1995) (Noting “with approval the recent decision of the Fourth District, In re Estate of Nicole Santos, 648 So.2d 277 (Fla. 4th DCA 1995) in which it was determined that the lex loci contractus doctrine governs the rights and liabilities of the parties to an antenuptial agreement.”)

[xiv] Michael S. Finch, Choice-of-Law and Property, Stetson Law Review Vol. XXVI, https://www.stetson.edu/law/lawreview/media/choice-of-law-and-property-26-1.pdf.