New NC Law Adds Predictability To Litigation Involving Business Contracts
North Carolina businesses commonly enter into contracts to buy or sell goods and services west of Murphy, north of Mount Airy, south of Charlotte, and even east of Ocracoke. When contracts such as these extend beyond state lines, businesses should intentionally assess and negotiate terms commonly called “choice of law” and “choice of forum” (or “forum selection”) provisions. These terms are up-front agreements to determine which state’s laws will govern any potential dispute relating to the contract, and in which state any potential lawsuit will be filed.
When potential disputes turn into actual litigation, choice of law and choice of forum provisions can be critical. For example, one state’s law may be more favorable to one of the parties, one of the parties could gain an advantage by litigating on its “home turf,” or one of the parties could save travel and business interruption cost by having the lawsuit filed nearby, rather than out of state. It isn’t uncommon for North Carolina businesses doing business with an entity from another state to see the advantage of applying North Carolina law and requiring litigation to occur in North Carolina.