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Read The Fine Print: Choice of Law Predetermined and Upheld (NJ)

May 22, 2019

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<p style="text-align: justify;">A New Jersey Appellate Court recently confirmed a contracting party’s right to enforce a choice of law provision in a contract. In<em> <a href="">National Fire v. Cintas</a>,</em> the plaintiff filed a subrogation claim for property damage caused by a faulty sprinkler system in a nursing home.  The contract between the nursing home and Cintas included a clause stating that the rights and obligations of the parties would be governed by the laws of Ohio.   The contract also included a waiver of subrogation clause.</p>
<p style="text-align: justify;">The trial court granted defendant Cinta’s motion for summary judgment due to the waiver clause in the contract, noting that such a waiver was valid and enforceable under Ohio law.  On appeal, the appellate court upheld the dismissal, noting that 1) the choice of law clause was valid, as Ohio has a substantial relationship to the transaction, because Cintas was headquartered in Ohio, and 2) Ohio courts have repeatedly held that waiver of subrogation clauses are valid and enforceable.</p>
<p style="text-align: justify;">This case reinforces the right of contracting parties to choose which laws will govern any potential disputes and a party’s ability to rely on contract clauses when litigation arises.</p>
<p style="text-align: justify;">Thank you to <a href="">Heather L. Aquino</a> for her contribution to this post.</p>

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