I’m trying to get a contract in place between my company and a contractor. While there are other issues, which we both understand, there is a minor one standing in the way. Their standard Master Agreement contains the following provision:
Governing Law. This License will be governed by and construed in accordance with the internal laws, and not the law of conflicts, of the State of Texas.
(italics are mine)
What the heck does this mean? My boss doesn’t know, I don’t know and their representatives with whom I’m dealing don’t know. We’ve got no problem with identifying the State of Texas as the governing jurisdiction; we like Texas judges, generally. But the internal laws v. law of conflicts thing has engendered head scratching. Anybody?
I’m no lawyer, but my WAG is that Texas still has some vestiges of its former status as an independent country in its constitution. Perhaps the “law of conflicts” would cover wartime (such as the period in which the original Texas consitituion was drafted?) and would have different policies than peace-time law. (For example, maybe habeas corpus would be suspeneded.)
But I’m not even a Texan, so this may well be just a shot in the dark.
I tried some web searches, but, though I’ve gotten some hits at AltaVista for ‘+Texas +“law of conflicts”’, I can’t translate the legal gobbledygook into anything I can comprehend. The “conflict of laws” seems to be a field of legal study involving situations in which laws contradict each other, but I’m not sure if that is the same thing as “law of conflicts.”
I guess our lawyers are all in court this morning…
First, you should consult your lawyer if you have questions. You shouldn’t sign a contract unless you know exactly what you’re getting into. Second, I’m going to give you a brief rundown, but I’m not giving you specific legal advice. See your lawyer. That’s my disclaimer.
The “internal laws” are Texas’s contract laws. They have both statutes and court decisions that delineate the responsibilities of a party in a contract. This is referred to as substantive law.
The “law of conflicts” refers to a set of rules Texas courts use to determine whose law applies in certain complicated fact situations. For instance, if your contract was signed in Texas between a Texas company and a Missouri company and is to be performed in Kansas, whose law should apply if there is a contract dispute? States have rules to decide these things. And under these rules, a Texas court might decide to use Kansas law in any lawsuit.
The contract clause you question is basically saying that if there is a contract dispute, both parties agree that Texas’s substantive contract law will be used if there is a lawsuit.