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MMLU / Two parties entered into a contract. The one party was a one-man manufacturer's…

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question

Two parties entered into a contract. The one party was a one-man manufacturer's independent distrubutor and the other party was an international conglomerate that manufactured construction materials for eventual delivery to new home builders. The contracting parties got into a dispute over the terms of the contract. The choice-of-law provision mandated Delaware law for all disputes. The independent distributor sued in California where most of his business on behalf of the manufacturer was conducted. The manufacturer was based in Illinois. The manufacturer argued for the application of Delaware law which was favorable to its position. Will the presiding state court have a sustainable reason for rejecting the choice-of-law provision and applying the law of the forum court?

choices

  1. No, there is no basis for rejecting a choice-of-law provision in a contract.
  2. Yes, where there is no relationship between the chosen forum and the parties and where one side obtained a contract of adhesion, the court will not generally enforce the choice-of-law provision.
  3. No, one of the parties is incorporated in Delaware and that is enough for the choice-of-law provision to be strictly adhered to.
  4. Yes, the party who brings the lawsuit can designate which state's law applies regardless of the existence of a choiceof- law provision in the contract.

subject

professional_law

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