New York Court of Appeals Confirms that New York Governing Law Clauses Should Be Enforced to Result in the Application of New York Substantive Law

This alert memo describes the New York Court of Appeals’ unanimous ruling last month that a New York governing law clause in a contract concerning a substantial commercial transaction, and thus subject to General Obligations Law Section 5-1401, requires that the contract be interpreted and enforced according to New York substantive law, even if applying New York conflict-of-laws rules would not yield that result, and the clause did not exclude the application of those rules.