Will a Florida court apply the law the contract chooses, and what does choosing another state's law cost us?
A choice-of-law provision is presumptively valid, and Florida will enforce it unless applying the chosen law would contravene a strong public policy of Florida (Southeast Floating Docks; Mazzoni Farms). The burden is on the party seeking to avoid the clause (Mazzoni Farms). The chosen law carries Florida's own substantive fee statutes out with it: where the parties chose another jurisdiction's substantive law, the offer-of-judgment statute, § 768.79, does not apply (Southeast Floating Docks). Separately, Fla. Stat. § 685.101(1) lets parties to a transaction of at least $250,000 (or equivalent value) choose Florida law 'whether or not such contract, agreement, or undertaking bears any relation to this state', to the extent the United States Constitution permits. § 685.102(1) lets an action on such a contract be maintained in Florida against an out-of-state party that agreed in it to submit to the jurisdiction of Florida's courts, while § 685.102(2) leaves the courts' jurisdiction over every other contract unaffected. Both sections carry their own application provision: each applies to contracts entered into on or after June 27, 1989, and to earlier contracts if the action or proceeding relating to them was commenced on or after that date.
The trap
Two Florida-specific edges. First, § 685.101's no-relationship guarantee is NOT general: subsection (2) takes out contracts for labor or employment, transactions for personal, family or household purposes (unless a trust with a Florida trustee), and transactions with no substantial or reasonable Florida relation where every party is a non-Florida US citizen or a non-Florida entity without a Florida place of business, so the statute does not rescue the two out-of-state parties who picked Florida law for neutrality, and subsection (3) leaves those clauses to the common-law test. Second, choosing another state's law in Florida silently gives up Florida's substantive fee statutes, and at least one limitation statute as well. Southeast Floating Docks holds § 768.79 (offer of judgment) is substantive for conflict-of-law as well as constitutional purposes, so a party who chose Michigan law could not use it, and the court disapproved two district court decisions that had applied § 768.79 anyway; it found that neither § 768.79 nor § 57.105 advances a public policy strong enough to override the policy of protecting freedom of contract. On limitation, Burroughs records that a two-year contractual limitation 'would be held void' under Fla. Stat. § 95.03 if Florida law governed, and held it good because the contract chose Michigan law.
13 authorities
- statuteFla. Stat. § 685.101enactment date not established
The words that state the rule
(1) The parties to any contract, agreement, or undertaking, contingent or otherwise, in consideration of or relating to any obligation arising out of a transaction involving in the aggregate not less than $250,000, the equivalent thereof in any foreign currency, or services or tangible or intangible property, or both, of equivalent value, including a transaction otherwise covered by s. 671.105(1), may, to the extent permitted under the United States Constitution, agree that the law of this state will govern such contract, agreement, or undertaking, the effect thereof and their rights and duties thereunder, in whole or in part, whether or not such contract, agreement, or undertaking bears any relation to this state.
- statuteFla. Stat. § 685.101enactment date not established
The words that state the rule
(2) This section does not apply to any contract, agreement, or undertaking:(a) Regarding any transaction which does not bear a substantial or reasonable relation to this state in which every party is either or a combination of:1. A resident and citizen of the United States, but not of this state; or 2. Incorporated or organized under the laws of another state and does not maintain a place of business in this state; (b) For labor or employment; (c) Relating to any transaction for personal, family, or household purposes, unless such contract, agreement, or undertaking concerns a trust at least one trustee of which resides or transacts business as a trustee in this state, in which case this section applies; (d) To the extent provided to the contrary in s. 671.105(2); or (e) To the extent such contract, agreement, or undertaking is otherwise covered or affected by s. 655.55.
- case82 So. 3d 73Southeast Floating Docks, Inc. v. Auto-Owners Insurance Co.Fla.decided 2012-02-02read it at the source ↗
The words that state the rule
An agreement between parties to be bound by the substantive laws of another jurisdiction is presumptively valid, and this Court will enforce a choice-of-law provision unless applying the chosen forum’s law would contravene a strong public policy of this State.
- case761 So. 2d 306Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co.Fla.decided 2000-06-08read it at the source ↗
The words that state the rule
Generally, Florida enforces choice-of-law provisions unless the law of the chosen forum contravenes strong public policy.
- case761 So. 2d 306Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co.Fla.decided 2000-06-08read it at the source ↗
The words that state the rule
Moreover, it is incumbent upon the party seeking to avoid enforcement of the provision to show that the foreign law contravenes public policy of the forum jurisdiction.
- case82 So. 3d 73Southeast Floating Docks, Inc. v. Auto-Owners Insurance Co.Fla.decided 2012-02-02read it at the source ↗
The words that state the rule
Accordingly, under a conflict of law analysis, when parties have agreed to be bound by the substantive law of another jurisdiction, section 768.79 simply does not apply.
- statuteFla. Stat. § 685.102enactment date not established
The words that state the rule
(1) Notwithstanding any law that limits the right of a person to maintain an action or proceeding, any person may, to the extent permitted under the United States Constitution, maintain in this state an action or proceeding against any person or other entity residing or located outside this state, if the action or proceeding arises out of or relates to any contract, agreement, or undertaking for which a choice of the law of this state, in whole or in part, has been made pursuant to s. 685.101 and which contains a provision by which such person or other entity residing or located outside this state agrees to submit to the jurisdiction of the courts of this state.
- statuteFla. Stat. § 685.101enactment date not established
The words that state the rule
(3) This section does not limit or deny the enforcement of any provision respecting choice of law in any other contract, agreement, or undertaking.
- case82 So. 3d 73Southeast Floating Docks, Inc. v. Auto-Owners Insurance Co.Fla.decided 2012-02-02read it at the source ↗
The words that state the rule
In applying our holding to the facts at hand, we conclude that Southeast is not entitled .to costs and fees under section 768.79 because the statute is substantive, and therefore inapplicable because Southeast and Auto-Owners have contractually agreed to be bound by the substantive laws of Michigan.
- statuteFla. Stat. § 685.101enactment date not established
The words that state the rule
(4) This section applies to:(a) Contracts entered into on or after June 27, 1989; and (b) Contracts entered into prior to June 27, 1989, if an action or proceeding relating to such contract is commenced on or after June 27, 1989.
- statuteFla. Stat. § 685.102enactment date not established
The words that state the rule
(2) This section does not affect the jurisdiction of the courts of this state over any action or proceeding arising out of or relating to any other contract, agreement, or undertaking. (3) This section applies to:(a) Contracts entered into on or after June 27, 1989; and (b) Contracts entered into prior to June 27, 1989, if an action or proceeding relating to such contract is commenced on or after June 27, 1989.
- case82 So. 3d 73Southeast Floating Docks, Inc. v. Auto-Owners Insurance Co.Fla.decided 2012-02-02read it at the source ↗
The words that state the rule
Accordingly, we answer the third certified question in the negative, and hold that because an award of attorney’s fees under Florida’s offer of judgment statute is a substantive right, section 768.79 will not apply in instances where the parties have agreed to be governed by the substantive law of another jurisdiction. In holding that section 768.79 is inapplicable in instances where parties have agreed to be bound by the substantive laws of another forum, we recognize that the majority holdings by the Fourth District in BDO Seidman, LLP v. British Car Auctions, Inc., 802 So.2d 366, 368 (Fla. 4th DCA 2001), and the Fifth District in Bennett v. Morales, 845 So.2d 1002 (Fla. *82 5th DCA 2003), have taken the position that introductory clause of section 768.79, which provides, “[i]n any civil action for damages filed in the courts of this state,” mandates the application of the statute irrespective of the parties’ choice of applicable substantive law. The Fifth District’s opinion in Bennett merely agrees with the reasoning of the majority conclusion in BDO Seidman that “section 768.79 applies to all civil actions for damages brought in Florida, even where the substantive law of another jurisdiction is applied.” 845 So.2d at 1004 . If the statute actually stated this, its plain reading would supersede the choice of law by the parties. But it does not. Thus, the reasoning of the Fourth District in BDO Seidman, as agreed with by the Fifth District in Bennett , is erroneous and we disapprove those cases to the extent they conflict with our opinion today.
- case472 So. 2d 1166Burroughs Corp. v. Suntogs of Miami, Inc.Fla.decided 1985-07-11read it at the source ↗
The words that state the rule
Under this Florida statute the two-year period provided in the contract would be held void because it is shorter than the five-year period provided for actions based on written contracts under section 95.11(2)(b), Florida Statutes (1975). However, the parties stipulated in their contract that the law of Michigan should govern its effect and interpretation. Michigan law permits the parties to a contract to designate a limitation period within which a lawsuit must be brought, even though shorter than any otherwise applicable statute of limitations, so long as they do not establish a time period of less than one year. Mich. Comp. Laws. § 440.2725 (1970).
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.