How does conflict of laws determine which country’s law applies to a dispute?

In the context of conflict of laws, courts determine which country’s law applies to a dispute through a process known as choice of law. Because legal systems vary globally, courts must decide whether to apply their own law—the lex fori—or the law of another jurisdiction.12

Courts generally rely on the following principles to make this determination:

• Connecting Factors: Legal systems use specific criteria to link a case to a particular legal system. For family law and inheritance, courts often look to a person’s nationality, domicile, or habitual residence. For commercial transactions, courts may emphasize the "closest connection" to a legal system, considering factors like the place of business, currency, or language used in negotiations.34
• Party Autonomy: Most countries recognize the freedom of parties to contractually agree on which law should govern their dispute.3
• Procedural Matters: Regardless of the substantive law applied to the dispute, a court will always apply its own procedural law.5
• Escape Devices: When rigid rules yield inappropriate results, courts may use techniques like recharacterizing the legal issue (e.g., treating a contract dispute as a tort) to apply a more suitable law.4