Legal Memorandum: Choice of Law Principles in NY

Issue: How will New York courts apply choice of law principles to interpret a contract and indemnity clause in a case arising out of an accident in a building in New York?

In Keywell Corp. v. Weinstein, 33 F.3d 159 (2d Cir. 1994), the purchaser of a metal recycling plant located in New York brought suit against the seller to recover environmental cleanup costs.  The purchase agreement contained a provision stating that Maryland law was applicable to the purchase agreement.  Despite this provision, the United States Court of Appeals for the Second Circuit affirmed the district court’s application of New York law to questions concerning the validity of the contract.  Id. at 163.  Accordingly, New York law regarding fraudulent misrepresentations was applied.  Similarly, in Walter E. Heller & Co. v. Video Innovations, Inc., 730 F.2d 50, 52 (2d Cir. 1984), the court held that although they must be considered, choice of law provisions do not control.  This is because New York has a strong interest in regulating conduct within its borders.  Von Kaulbach v. Keoseian, 783 F. Supp. 170, 174 (S.D.N.Y. 1992).  See also Perrin v. Pearlstein, 314 F.2d 863, 867 (2d Cir. 1963) (the intention of the parties is not controlling on choice of law issues when other considerations establish that the "center of gravity" or the "most significant contacts with the matter in dispute" lie in New York); Kristinus v. H. Stern Com. E Ind. S.A., 463 F. Supp. 1263 (S.D.N.Y. 1979) (when a contract is to be performed in New York, the New York court would decline to apply foreign law where that law would […]