Incorporating a Litigator’s View in Transactional Matters Avoids Later Problems

New Jersey State Bar Association Business Law Section Newsletter October 2014

Robert Travisano, Member of the Firm in the Litigation practice, in the Newark and New York offices, authored an article titled “Incorporating a Litigator’s View in Transactional Matters Avoids Later Problems.”

Following is an excerpt:

The application of one state’s law versus that of anoth­er can be critical to the outcome of a legal dispute. It may affect a litigant’s very ability to maintain a legal action (in the case of statutes of limitation or repose), overall liabil­ity (application of charitable immunity or comparative fault laws) or even the amount and types of damages a plaintiff may be able to recover. Rather than blindly cast­ing a client’s lot to some court’s potentially amorphous interest analysis relative to which law applies, includ­ing a choice of law clause in the transaction agreement should alleviate a large part of the mystery.

It is important to note at the outset that a federal court exercising its diversity jurisdiction will utilize the choice of law rules of the state in which the action is pending. The practical impact of this rule is that the law of the selected state memorialized in the agreement will not automatically apply from the matter’s inception in federal court. Rather, the forum state’s law will govern with respect to which law applies in the first instance and throughout the litigation with respect to procedural issues. 

The attached article was originally published in the October 2014 issue of the Business Law Section Newsletter, a publication of the New Jersey State Bar Association, and is reprinted here with permission.