It is common for construction contracts to include a choice-of-law provision or language. This is language that says the contract is to governed under the laws of the state of Florida (by way of example). Pick any jurisdiction. There may be other language in the provision, but the gist is that if there is a dispute arising under the agreement, the laws of the state designated in the choice-of-law provision will apply.
For example, you can have an agreement in Florida with a vendor but that agreement includes a choice-of-law provision that says the state of Virginia applies. This is because the vendor may be based in Virginia and the agreement was based on Virginia law.
However, a choice-of-law provision can be waived if it is not timely raised in a lawsuit. So, if you are in a dispute in Florida under an agreement that says Virginia law applies, the application of Virginia law can be waived if it is not raised. This is an important consideration because the designated state may contain more favorable legal principles on a given issue. This was the circumstance discussed here where the Virginia choice-of-law provision was waived because it was not timely raised. Had it been timely raised, it would have benefited a party on an issue dealing with attorney’s fees which is treated differently in Florida.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.