Will an Illinois court apply the law we chose, and does the clause carry the limitations period with it?
Generally choice-of-law provisions will be honored, and for a transaction bearing a reasonable relation to Illinois and also to another state the UCC expressly lets the parties agree that either state's law governs, but only 'Except as otherwise provided in this Section' (810 ILCS 5/1-301(a)), and the Section does otherwise provide: under § 1-301(c), where one of eight named UCC provisions specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent the law so specified permits (§§ 2-402; 2A-105 and 2A-106; 4-102; 4A-507; 5-116; 8-110; 9-301 through 9-307; 12-107), and absent an effective agreement under (a) the UCC applies to transactions bearing an appropriate relation to Illinois (§ 1-301(b)). But as to procedural matters the law of the forum controls, and Illinois classifies statutes of limitations as procedural (they merely fix the time in which the remedy may be sought and do not alter substantive rights), so in Belleville Toyota, Illinois law governed the timeliness of a claim on a dealer agreement that chose California law. That appeal ended split: the supreme court affirmed in part and reversed in part the judgments of the circuit and appellate courts and remanded with directions.
The trap
The clause buys the chosen state's substantive law and NOT its limitations period: an Illinois forum applies Illinois limitation law, ten years for most written contracts (735 ILCS 5/13-206), except that a sale of goods takes the UCC's own period (13-206 opens 'Except as provided in Section 2-725'), and under the borrowing rule of 735 ILCS 5/13-210 a cause of action that arose in the chosen state and is time-barred there cannot be maintained in Illinois either. Two statutory voids override the clause outright: a choice of another state's law in (or executed in connection with) a building and construction contract to be performed in Illinois is void as against public policy (815 ILCS 665/10), and as amended by P.A. 104-320 the Workplace Transparency Act voids a unilateral employment condition that applies non-Illinois law to an Illinois employee's unlawful-employment-practice claim (820 ILCS 96/1-25(b)). One thing about the Workplace Transparency Act is missing from every rule that cites it, and it is the drafting answer rather than a footnote: § 1-25 voids the clause as a UNILATERAL condition of employment, not outright. § 1-25(c) provides that “Any agreement, clause, covenant, or waiver that is a mutual condition of employment or continued employment may include provisions that would otherwise be against public policy as a unilateral condition of employment or continued employment, but only if the agreement, clause, covenant, or waiver is in writing, demonstrates actual, knowing, and bargained-for consideration from both parties, and acknowledges the right of the employee or prospective employee to:” and then lists six rights the writing must acknowledge, reporting a good-faith allegation of unlawful employment practices to a government agency, reporting criminal conduct, participating in a proceeding about unlawful employment practices, making truthful statements or disclosures required by law, requesting or receiving confidential legal advice, and engaging in concerted activity about work-related issues. § 1-25(d) then supplies the sanction: “Failure to comply with the provisions of subsection (c) shall establish a rebuttable presumption that the agreement, clause, covenant, or waiver is a unilateral condition of employment or continued employment that is governed by subsection (a) or (b).” And § 1-25(e) adds that nothing in the section prevents an employee or prospective employee and an employer from negotiating and bargaining over the terms, privileges and conditions of employment. So in Illinois the move is not to delete the clause but to make it mutual, written, supported by actual bargained-for consideration on both sides and carrying the six acknowledgments; miss any of that and subsection (d) puts it back under (a) or (b).
12 authorities
- case770 N.E.2d 177Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc.Ill.decided 2002read it at the source ↗
The words that state the rule
Generally, choice of law provisions will be honored. Hofeld v. Nationwide Life Insurance Co., 59 Ill.2d 522, 528-29 , 322 N.E.2d 454 (1975); see also Hartford v. Burns International Security Services, Inc., 172 Ill.App.3d 184, 187 , 122 Ill.Dec. 204 , 526 N.E.2d 463 (1988). As to procedural matters, however, the law of the forum controls.
- case770 N.E.2d 177Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc.Ill.decided 2002read it at the source ↗
The words that state the rule
Statutes of limitations are procedural, merely fixing the time in which the remedy for a wrong may be sought, and do not alter substantive rights. Fredman Brothers 109 Ill.2d at 209 , 93 Ill.Dec. 360 , 486 N.E.2d 893 ; see also Cox, 212 Ill.App.3d at 1062 , 156 Ill.Dec. 1031 , 571 N.E.2d 1011 . Accordingly, Illinois law governs the timeliness of plaintiff's claim under the 1980 dealer agreement.
- statute810 ILCS 5/1-301enactment date not established
The words that state the rule
(a) Except as otherwise provided in this Section, when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties.
- statute815 ILCS 665/10enactment date not established
The words that state the rule
A provision contained in or executed in connection with a building and construction contract to be performed in Illinois that makes the contract subject to the laws of another state or that requires any litigation, arbitration, or dispute resolution to take place in another state is against public policy. Such a provision is void and unenforceable.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, including that which purports to shorten the applicable statute of limitation, apply non-Illinois law to an Illinois employee's claim, or require a venue outside of Illinois to adjudicate an Illinois employee's claim, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices
- statute735 ILCS 5/13-206enactment date not established
The words that state the rule
Except as provided in Section 2-725 of the "Uniform Commercial Code", actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing and actions brought under the Illinois Wage Payment and Collection Act shall be commenced within 10 years next after the cause of action accrued
- statute735 ILCS 5/13-210enactment date not established
The words that state the rule
When a cause of action has arisen in a state or territory out of this State, or in a foreign country, and, by the laws thereof, an action thereon cannot be maintained by reason of the lapse of time, an action thereon shall not be maintained in this State.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Any agreement, clause, covenant, or waiver that is a mutual condition of employment or continued employment may include provisions that would otherwise be against public policy as a unilateral condition of employment or continued employment, but only if the agreement, clause, covenant, or waiver is in writing, demonstrates actual, knowing, and bargained-for consideration from both parties, and acknowledges the right of the employee or prospective employee to:
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Failure to comply with the provisions of subsection (c) shall establish a rebuttable presumption that the agreement, clause, covenant, or waiver is a unilateral condition of employment or continued employment that is governed by subsection (a) or (b).
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
(1) report any good faith allegation of unlawful employment practices to any appropriate federal, State, or local government agency enforcing discrimination laws; (2) report any good faith allegation of criminal conduct to any appropriate federal, State, or local official; (3) participate in a proceeding related to unlawful employment practices, including any litigation brought by any federal, State, or local government agency or any other person who alleges that the employer has violated any State, federal, or local law, regulation, or rule; (4) make any truthful statements or disclosures required by law, regulation, or legal process; (5) request or receive confidential legal advice; and (6) engage in concerted activity to address work-related issues.
- statute810 ILCS 5/1-301enactment date not established
The words that state the rule
(b) In the absence of an agreement effective under subsection (a), and except as provided in subsection (c), the Uniform Commercial Code applies to transactions bearing an appropriate relation to this State. (c) If one of the following provisions of the Uniform Commercial Code specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified: (1) Section 2-402; (2) Sections 2A-105 and 2A-106; (3) Section 4-102; (4) Section 4A-507; (5) Section 5-116; (6) Section 8-110; (7) Sections 9-301 through 9-307; (8) Section 12-107.
- case770 N.E.2d 177Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc.Ill.decided 2002read it at the source ↗
The words that state the rule
For the foregoing reasons, we affirm in part and reverse in part the judgments of the circuit and appellate courts and remand this matter to the circuit court for further proceedings. *202 Judgments affirmed in part and reversed in part; cause remanded with directions.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.