When NY's Public Policy Will - and Won't - Override the Choice of Law Provision in a Contract
Perhaps the most important exception to the general rule that New York's courts will abide by the parties' choice of which state's law to follow in determining a dispute over a contract is where the chosen state's laws offend New York State's public policy.
At first blush, it would appear that choice of law provisions could be overridden every time New York's laws conflict with that of the chosen jurisdiction. Not surprisingly, the public policy exception is far narrower, and will only apply in exceptionally rare circumstances; otherwise, the exception would swallow the rule.
To that end, New York's Court of Appeals (the highest State court in New York) has articulated the standard for applying the public policy exception as follows:
"We must determine whether New York's public policy against such contracts is so fundamental that it should override the parties' choice of law ... As we said in Cooney v Osgood Mach. (81 NY2d 66, 79 ), "plainly not every difference between foreign and New York law threatens our public policy. Indeed, if New York statutes or court opinions were routinely read to express fundamental policy, choice of law principles would be meaningless." Welsbach Elec. Corp. v MasTec N. Am., Inc., 7 NY3d 624 (2007).
The takeaway from this should be evident:
You should NEVER assume that the choice of law provision in your contract will be void as against public policy simply because it differs - even if significantly so - from New York law.