Legal Question in Business Law in Texas

Jurisdiction; ''Choice of Law''

My question concerns the ability to choose which state's laws shall govern the legality of a contract.

Scenario: two people living and working in State #1 enter into a contract that, for whatever reasons, is illegal and/or invalid by the laws of State #1.

The contract that they signed, however, states that their contract shall be governed by the laws of State #2. Assuming that their contract is legal and valid according to the laws of State #2, do they have a legal, enforceable contract?


Asked on 2/09/06, 2:31 pm

1 Answer from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Jurisdiction; ''Choice of Law''

They have a valid contract because they chose the law of a state where the contract would be valid. Example: A contract to repay a gambling debt is invalid in Texas as a matter of public policy. However, if the contract is agreed by both parties to be governed under the laws of the State of Nevada, where I.O.U.'s are legal, then the contract is legal.

Whether the Texas courts would enforce it is open to question.

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Answered on 2/09/06, 6:46 pm


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