Will a Wisconsin court apply the law we chose, or Wisconsin law?
Wisconsin courts have acknowledged that parties to a contract may expressly agree that the law of a particular jurisdiction shall control their contractual relations, but the Supreme Court of Wisconsin held in Bush that the proposition is by no means unqualified: because the Wisconsin Fair Dealership Law embodies a strong state public policy, parties cannot avoid it by including a contrary choice-of-law provision in their contract. The court described the kind of law that does this work: statutes or common law which make a particular type of contract enforceable, such as usury laws, or which make a particular contract provision unenforceable, such as laws prohibiting covenants not to compete, or that are designed to protect a weaker party against the unfair exercise of superior bargaining power, are likely to embody an important state public policy.
The trap
The test is not whether the chosen state's law is worse for the objecting party but whether Wisconsin's policy is fundamental. In Bush the defendant argued that Minnesota also protected franchises against unfair termination; that did not save the clause, because the legislature had declared the Fair Dealership Law fundamental policy and had specifically provided that its effect cannot be varied by contract. The policy that counts is the policy of the state whose law would apply if the clause were disregarded, not the relative merits of the two states' law. The category the court described is a description of the kinds of law likely to embody such a policy, not a list of clauses that are void: the court said in terms that a precise delineation of the policies important enough to override a choice-of-law stipulation is not possible. Bush decided the Fair Dealership Law: the court refused to honour that clause and Wisconsin law applied. Whether another Wisconsin statute clears the same bar is not decided here.
7 authorities
The words that state the rule
We further conclude that because the WFDL embodies a strong state public policy, parties cannot avoid it by including a contrary choice of law provision in their contract.
The words that state the rule
A precise delineation of those policies which are sufficiently important to warrant overriding a contractual choice of law stipulation is not possible. In general, however, statutes or common law which make a particular type of contract enforceable, e.g., usury laws, or which make a particular contract provision unenforceable, e.g., laws prohibiting covenants not to compete, or that are designed to protect a weaker party against the unfair exercise of superior bargaining power by another party, are likely to embody an important state public policy.
The words that state the rule
While Wisconsin courts have acknowledged that parties to a contract may expressly agree that the law of a particular jurisdiction shall control their contractual relations; Jefferis v. Austin, 182 Wis. 203, 205 , 196 N.W. 238 (1923); Brown v. Gates, 120 Wis. 349 , 97 N.W. 221 (1904); First Wis. Nat. Bank of Madison v. Nicolaou, 85 Wis. 2d 393 , 397 n. 1, 270 N.W.2d 582 (Ct. App. 1978), this proposition is by no means unqualified.
The words that state the rule
National argues that Wisconsin ordinarily follows the same termination-at-will rule as Minnesota and that if indeed a franchise/dealership is involved, Minnesota law also protects franchises against unfair termination. Minnesota Stat. sec. 80C.14 Subd. 2(a) (1986). In contrast, Bush argues that whether he would receive protection under Minnesota’s franchise law is highly debatable. National in fact concedes that Minnesota and Wisconsin law are not co-extensive. Bush points out that the Wisconsin legislature has declared the WFDL fundamental policy and has specifically provided that its effect cannot be varied by contract. This public policy, Bush contends, renders *642 the choice of law clause in the employment contract unenforceable. We agree.
The words that state the rule
The statement of purpose and policy contained in the statute sec. 135.025(2), set forth in full below, 2 coupled with the explicit directive *645 that the effect of the WFDL "may not be varied by contract or agreement” and "[a]ny contract or agreement purporting to do so is void and unenforceable to that extent..amply support this court’s conclusion that a strong public policy is implicated in this case.
The words that state the rule
Though we recognize that the party autonomy principle, i.e., permitting parties to stipulate the applicable law in the contract and honoring that stipulation, promotes certainty and predictability in contractual relations, see Willis L. M. Reese, Choice of Law in Torts and Contracts and Directions for the Future, 46 Colum. J. Transnat’l L. 1, 22-24, it cannot be permitted to do so at the expense of important public policies of a state whose law would be applicable if the parties choice of law provision were disregarded.
The words that state the rule
Therefore the court will not honor the parties’ choice of law clause. National does not argue that absent an effective choice of law provision Minnesota law would still apply. Rather, at oral argument and in its brief to this court it contends that Bush does not meet the Wisconsin statutory definition of dealer. We view this as an acknowledgment by National that Wisconsin law applies if the choice of law clause is disregarded.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.