In Ministers & Missionaries Benefit Bd. v. Snow, 2015 NY Slip Op 09186 (Ct App Dec. 15, 2015), the Court held that when a contract states that it governed by New York law, courts are forbidden from applying out-of-state law because courts must assume a choice of law clause evidences the parties' intent that their contractual rights are not to be subject to the laws of another state.
The Court explained that "when parties include a choice-of-law provision in a contract, they intend application of only that state's 'substantive law'," and therefore "New York's common-law conflict-of-laws principles should not apply when the parties have chosen New York law to govern their dispute."
"Stated differently, New York courts should not engage in any conflicts analysis where the parties include a choice-of-law provision in their contract, even if the contract is one that does not fall within General Obligations Law § 5-1401." Id.
The Court reasoned that "logic dictates that, by including a choice-of-law provision in their contracts, the parties intended for only New York substantive law to apply." Id.
Consequently, "when parties include a choice-of-law provision in a contract, they intend that the law of the chosen state -- and no other state -- will be applied. In such a situation, the chosen state's substantive law . .. is to be applied, unless the parties expressly indicate otherwise." Id.