Choice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary to reconcile the differences between the laws of different legal jurisdictions, such as states, federated states (as in the US), or provinces. The outcome of this process is potentially to require the courts of one jurisdiction to apply the law of a different jurisdiction in lawsuits arising from, say, family law, tort or contract. The law which is applied is sometimes referred to as the "proper law".

The sequence of events in conflict cases
The "traditional approach" looks to territorial factors, e.g. the domicile or nationality of the parties, where the components comprising each cause of action occurred, where any relevant assets, whether movable or immovable, are located, etc., and chooses the law or laws that have the greatest connection to the cause(s) of action. Even though this is a very flexible system, there has been some reluctance to apply it and various "escape devices" have developed, which allow courts to apply their local laws (the lex fori) even though the disputed events took place in a different jurisdiction. The parties themselves may plead the case either to avoid invoking a foreign law or agree to the choice of law, assuming that the judge will not of his or her own motion go behind the pleadings. Their motive will be pragmatic. Full-scale conflict cases take longer and cost more to litigate. However, the courts in some states are predisposed to prefer the lex fori wherever possible. This may reflect the belief that the interests of justice will be better served if the judges apply the law with which they are most familiar, or it may reflect a more general parochialism in systems not used to considering extraterritorial principles of law. One of the most common judicial strategies is to skew the characterization process. By determining that a claim is one involving a contract instead of tort, or a question of family law instead of a testamentary issue, the Court can change the choice of law rules. For example, if an employee is hired by an employer in State A, is injured due to the employer's negligence in State B, and files a lawsuit to recover for the injury in State A, the court in State A might look to the employment contract to see if it contained a clause that governed the employer's duty of care with respect to the employee. If so, the court may be able characterize the claim as a breach of the contract, instead of a tort, and apply the law of the State A either because it was the place where the contract was made (the lex loci contractus) or, if it were the place where the wage or salary was to be paid, where the contract was intended to be performed (the lex loci solutionis).
In this context, it is noted that, since the 1960s, the courts in the United States began developing a number of new approaches, as well as new escape devices. This reflects the number of different laws that might be relevant in any given case before an American court. There is significant interstate trade and social mobility, and with the laws of each state of the Union representing a possible opportunity for conflict, it was necessary to produce a coherent system that could be applied in the courts of all fifty states.

The choice of law stage
To limit the damage that would result from forum shopping, it is desirable that the same law is applied to achieve the same result no matter where the case is litigated. The system of renvoi, which literally means "send back", is an attempt to achieve that end.

Renvoi
The traditional approach is based on the idea that the territorial sovereignty of states must be respected. For example, when an event happens in a state that gives rise to a lawsuit - if two parties are involved in an automobile accident, for example - that state in which the accident occurred provides the parties with certain "vested rights". These rights include such things as the ability of a plaintiff to file a lawsuit, the imposition of a statute of limitations to prevent a defendant from being subjected to a lawsuit after too much time has passed, limitations on recovery, and specified burdens of evidence. These so-called vested rights compete with the policy claims of other states for their laws to be applied. What follows is a generalised summary of the rules. The approach in the U.S. is rather different (see Conflict of laws in the U.S.).

Traditional approach
Status is relevant for a wide array of issues. Self-evidently, unless the proposed litigant has legal personality, there will be no jurisdiction. It will also be relevant to immigration, entitlement to social security and similar benefits, family law, contract, etc. The choice of law rule is the law of the domicile (lex domicilii) if the forum is common law, or law of nationality (lex patriae) or habitual residence if the forum is civil law applies to determine all question of status and its legal attributes. The lex fori determines the domicile, nationality or habitual residence, and applies that law to establish an in rem set of rights and capacities. Thus, under some laws, the status of illegitimate affects the rights of inheritance in the case of an intestacy, etc. As to corporations, the choice of law rule is the law of incorporation (the lex incorporationis) for all matters of capacity, validity, shareholders' rights, etc.

Status
For a full explanation, see: contract (conflict)
The choice of law rules for contracts are more complicated than the law affecting other obligations because they depend on the express or implied intentions of the parties and their personal circumstances. For example, questions as to whether a contract is valid may depend on the capacity of the parties to enter into a contract. This could be decided by reference to the lex domicilii, lex patriae or habitual residence of the parties, or for policy reasons, by reference to the lex loci contractus. But, if the contract was made electronically, where the contract was actually made must first be decided either by the lex fori or the putative proper law depending on the forum rules. There may also be problems if the parties selected the place where the contract was made in the hope of evading the operation of some mandatory provisions in another relevant law.
On the other hand, deciding matters relating to performance will usually depend on the lex loci solutionis. Another unique characteristic of contracts is that the parties can decide which law should apply for most purposes, and memorialize that decision into the contract itself (see forum selection clause and choice of law clause) — although not every jurisdiction will enforce such provisions. For the harmonising provisions on contractual obligations in EU law, see the Rome Convention (contract).

Family Law
For jja full explanation, see: property (conflict)
The rule for immovable property (called real property in common law states) is that the lex situs applies to all questions of title. Movable property (called personalty in common law states) claims are governed by the law of the state in which the property is located at the time the rights are supposedly created. An important distinction, however, must be made for a contract which has some incidental effect on property, both immovable and movable, such as a loan with property pledged as a collateral. If the property is incidental to the contract, then the contract is evaluated under traditional choice of law principles for a contract. If, however, the primary purpose of the contract is to transfer the property, then the entire contract will be evaluated under the law of the state where the property is located.