Summary
The New York Court of Appeals held that Florida law governed the parties' construction subcontract under its choice-of-law provision. Although New York public policy invalidated pay-if-paid provisions under Lien Law § 34, that policy was not sufficiently fundamental to override the parties' choice of Florida law, which enforced the provision.
Holdings
- New York courts generally enforce a contractual choice-of-law clause when the chosen law bears a reasonable relationship to the parties or transaction, unless application of the chosen law violates a fundamental New York public policy.
- New York's public policy against pay-if-paid clauses is not sufficiently fundamental to override the parties' choice of Florida law in this dispute.
Questions Presented
- Whether the parties' contractual choice of Florida law should be enforced when Florida law permits pay-if-paid provisions that New York law would invalidate under Lien Law § 34.
- Whether New York's public policy against pay-if-paid provisions is sufficiently fundamental to override the parties' choice of Florida law.
Disposition
reversed
Cases Cited (20)
- West-Fair Elec. Contrs. v. Aetna Cas. & Sur. Co., 87 N.Y.2d 148 (1995)(followed and limited)
- Cooney v. Osgood Mach., 81 N.Y.2d 66 (1993)(followed)
- Greenfield v. Philles Records, 98 N.Y.2d 562 (2002)(followed)
- R/S Assoc. v. New York Job Dev. Auth., 98 N.Y.2d 29 (2002)(followed)
- W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157 (1990)(followed)
- Vermont Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470 (2004)(followed)
- Reiss v. Financial Performance Corp., 97 N.Y.2d 195 (2001)(followed)
- Loucks v. Standard Oil Co. of N.Y., 224 N.Y. 99 (1918)(followed)
- Scheiber v. St. John's Univ., 84 N.Y.2d 120 (1994)(followed)
- Sanders v. Winship, 57 N.Y.2d 391 (1982)(followed)
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Court Document
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