Will a Utah court apply the law the parties chose?
For transactions within the Uniform Commercial Code, when a transaction bears a reasonable relation to Utah and also to another state or nation the parties may agree that the law of either governs their rights and duties, except as § 70A-1a-301 itself provides otherwise. Outside it, the Utah Supreme Court in Prows v. Pinpoint Retail Systems applied Restatement (Second) of Conflict of Laws § 187(2)(a), under which the chosen state's law is applied unless the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the choice, and read it through its comments: the rule of § 187(2) applies only when two or more states have an interest in the particular issue and does not apply when all contacts are in a single state, so a New York choice in an agreement signed and to be performed in Utah, where the alleged breach occurred and New York had no interest, was without effect and the court decided the question under Utah law.
The trap
A choice of law with no real connection to the deal buys nothing when every contact is in Utah, even if the drafter had a 'reasonable basis' for the choice (Prows: wanting to limit the forums in which it could be sued). Statutes also override the clause for particular contracts: an out-of-state forum clause in a Utah construction agreement, meaning one between a construction manager, general contractor, subcontractor, sub-subcontractor, supplier or any combination of them (§ 13-8-3) and in a veterinarian non-compete entered on or after May 6, 2026 (§ 34-51-201) is void. § 70A-1a-301 itself lists provisions of the UCC (for example perfection and priority of security interests) whose own choice-of-law rules govern and limit a contrary agreement.
9 authorities
- statuteUtah Code § 70A-1a-301enactment date not established
The words that state the rule
Except as 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.
The words that state the rule
The comments to section 187 state that the rule of subsection (2) “applies only when two or more states have an interest in the determination of the particular issue”; it does not apply “when all contacts are located in a single state and when, as a consequence, there is only one interested state.
- statuteUtah Code § 34-51-201enactment date not established
The words that state the rule
If a provision in a veterinarian non-compete agreement entered into on or after May 6, 2026, requires that the parties to a dispute arising under the veterinarian non-compete agreement resolve the dispute in a forum outside of this state, the provision: is void and unenforceable; and is considered against the public policy of this state.
- statuteUtah Code § 13-8-3enactment date not established
The words that state the rule
A provision in a construction agreement requiring a dispute arising under the agreement to be resolved in a forum outside of this state is void and unenforceable as against the public policy of this state if: one of the parties to the agreement is domiciled in this state; and work to be done and the equipment and materials to be supplied under the agreement involves a construction project in this state.
The words that state the rule
On its face, the rule appears to support Pinpoint’s position. While New York has no “substantial relationship” to the parties or the transaction, there is a “reasonable basis” for Pinpoint’s choosing New York law to govern the YAR agreement — Pinpoint wants to “limit the number of forums in which it may be required to bring or defend an action.” The existence of that “reasonable basis,” however, is without effect.
The words that state the rule
New York has no interest in the determination of this ease. A Utah plaintiff brought this suit against a Utah defendant and a Canadian defendant. The VAR agreement was to be performed in Utah. It was signed in Utah, and the alleged breach and tortious conduct occurred here. All relevant “contacts” occurred in Utah, and as a consequence, Utah is the only state "with an interest in the action. For this reason, we are not bound by New York.law in determining the validity of the choice-of-forum provision in section 13.8 of the VAR agreement. Rather, we decide the question under Utah law, which until this time has been virtually silent on the issue.
- statuteUtah Code § 70A-1a-301enactment date not established
The words that state the rule
Where one of the following provisions of this title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law, including the conflict of laws rules, so specified: rights of creditors against sold goods under Section 70A-2-402 ; applicability of the chapter on leases under Sections 70A-2a-105 and 70A-2a-106 ; applicability of the chapter on bank deposits and collections under Section 70A-4-102 ; applicability of the chapter on funds transfers under Section 70A-4a-507 ; applicability of the chapter on letters of credit under Section 70A-5-116 ; applicability of the chapter on investment securities under Section 70A-8-109 ; law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens under Sections 70A-9a-301 through 70A-9a-307 ; or Section 70A-12-107 .
The words that state the rule
The Second Restatement of Conflict of Laws provides: (2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless ... (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties [sic] choice.... Restatement (Second) Conflict of Laws § 187(2)(a) (Supp.1988).
- statuteUtah Code § 13-8-3enactment date not established
The words that state the rule
As used in this section, "construction agreement" means a construction contract, subcontract, or purchase order for the design, construction, installation, or repair of an improvement to real property between a: construction manager; general contractor; subcontractor; sub-subcontractor; supplier; or any combination of the persons described under Subsections (1)(a) through (e) .
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.