125 Mass. 374 - 18782
SUPREME COURT OF MASSACHUSETTS4
Worcester. Oct. 4, 1877. —Sept . 12, 1878. ENDICOTT & LORD , JJ absent.5
The validity of a contract, even as regards the capacity of the parties, is generally to be determined by the law of the state in which it is made.6
If an inhabitant of this Commonwealth buys goods personally in another state, or7
orders them by letter mailed here, and they are delivered to a carrier for him there, the contract is made in that state.8
A contract of guaranty, signed in this Commonwealth and sent by mail to another state, and assented to and acted on there, for the price of goods sold there, is made in that state.9
A contract, made in another state by a married woman domiciled here, which a married woman was not at the time capable of making under the law of this Commonwealth, but was then allowed by the law of that state to make, and which she could now lawfully make in this Commonwealth, will sustain an action against her in our courts, although the contract was made by letter sent from her here to the other party there.10
 CONTRACT to recover $500 and interest from January 6,1872. Writ dated June 30, 1875. The case was submitted to the Superior Court on agreed facts, in substance as follows:11
The plaintiffs are partners doing business in Portland, Maine, under the firm name of Deering, Milliken & Co. The defendant is and has been since 1850, the wife of Daniel Pratt, and both have always resided in Massachusetts. In 1870, Daniel, who was then doing business in Massachusetts, applied to the plaintiffs at Portland for credit, and they required of him, as a condition of granting the same, a guaranty from the defendant to the amount of five hundred dollars, and accordingly he procured from his wife the following instrument:12
"Portland, January 29, 1870. In consideration of one dollar paid by Deering, Milliken & Co., receipt of which is hereby acknowledged, I guarantee the payment to them by Daniel Pratt of the sum of five hundred dollars, from time to time as he may want—this to be a continuing guaranty. Sarah A. Pratt."13
This instrument was executed by the defendant two or three days after its date, at her home in Massachusetts, and there delivered by her to her husband, who sent it by mail from Massachusetts to the plaintiffs in Portland; and the plaintiffs received it from the post office in Portland early in February, 1870.14
 The plaintiffs subsequently sold and delivered goods to Daniel from time to time until October 7, 1871, and charged the same to him, and, if competent, it may be taken to be true, that in so doing they relied upon the guaranty. Between February, 1870, and September 1, 1871, they sold and delivered goods to him on credit to an amount largely exceeding $ 500, which were fully settled and paid for by him. This action is brought for goods sold from September 1, 1871, to October 7, 1871, inclusive, amounting to $ 860.12, upon which he paid $ 300, leaving a balance due of $560.12. The one dollar mentioned in the guaranty was not paid, and the only consideration moving to the defendant therefor was the giving of credit by the plaintiffs to her husband. Some of the goods were selected personally by Daniel at the plaintiffs' store in Portland, others were ordered by letters mailed by Daniel from Massachusetts to the plaintiffs at Portland, and all were sent by the plaintiffs by express from Portland to Daniel in Massachusetts, who paid all express charges. The parties were cognizant of the facts.15
By a statute of Maine, duly enacted and approved in 1866, it is enacted that "the contracts of any married woman, made for any lawful purpose, shall be valid and binding, and may be enforced in the same manner as if she were sole." The statutes and the decisions of the court of Maine may be referred to.16
Payment was duly demanded of the defendant before the date of the writ, and was refused by her.17
The Superior Court ordered judgment for the defendant; and the plaintiffs appealed to this court.18
The general rule is that the validity of a contract is to be determined by the law of the state in which it is made; if it is valid there, it is deemed valid everywhere, and will sustain an action in the courts of a state whose laws do not permit such a contract. Scudder v. Union National Bank, 91U.S. 406. Even a contract expressly prohibited by the statutes of the state in which the suit is brought, if not in [**4] itself immoral, is not necessarily nor usually deemed so invalid that the comity of the state, as administered by its courts, will refuse to entertain an action on such a contract made by one of its own  citizens abroad in a state the laws of which permit it. Greenwood v. Curtis, 6 Mass. 358. M'Intyre v. Parks, 3 Met. 207.20
If the contract is completed in another state, it makes no difference in principle whether the citizen of this state goes in person, or sends an agent, or writes a letter, across the boundary line between the two states. As was said by Lord Lyndhurst, "If I, residing in England, send down my agent to Scotland, and he makes contracts for me there, it is the same as if I myself went there and made them." Pattison v. Mills, 1 Dow & Cl. 342, 363. So if a person residing in this state signs and transmits, either by a messenger or through the post-office, to a person in another state, a written contract, which requires no special forms or solemnities in its execution, and no signature of the person to whom it is addressed, and is assented to and acted on by him there, the contract is made there, just as if the writer personally took the executed contract into the other state, or wrote and signed it there; and it is no objection to the maintenance of an action thereon here, that such a contract is prohibited by the law of this Commonwealth. M'Intyre v. Parks, above cited.21
The guaranty, bearing date of Portland, in the State of Maine, was executed by the defendant, a married woman, having her home in this Commonwealth, as collateral security for the liability of her husband for goods sold by the plaintiffs to him, and was sent by her through him by mail to the plaintiffs at Portland. The sales of the goods ordered by him from the plaintiffs at Portland, and there delivered by them to him in person, or to a carrier for him, were made in the State of Maine. Orcutt v. Nelson, 1 Gray 536. Kline v. Baker, 99 Mass. 253. The contract between the defendant and the plaintiffs was complete when the guaranty had been received and acted on by them at Portland, and not before. Jordan v. Dobbins, 122 Mass. 168. It must therefore be treated as made and to be performed in the State of Maine.22
The law of Maine authorized a married woman to bind herself by any contract as if she were unmarried. St.of Maine of 1866, c. 52. Mayo v. Hutchinson, 57 Me. 546. The law of Massachusetts, as then existing, did not allow her to enter into a contract as surety or for the accommodation of her husband or of  any third person. Gen. Sts. c. 108, 3. Nourse v. Henshaw,123 Mass. 96. Since the making of the contract sued on, and before the bringing of this action, the law of this Commonwealth has been changed, so as to enable married women to make such contracts. St. 1874, c. 184. Major v. Holmes, 124 Mass. 108. Kenworthy v. Sawyer, ante, 28.23
The question therefore is, whether a contract made in another state by a married woman domiciled here, which a married woman was not at the time capable of making under the law of this Commonwealth, but was then allowed by the law of that state to make, and which she could now lawfully make in this Commonwealth, will sustain an action against her in our courts.24
It has been often stated by commentators that the law of the domicil, regulating the capacity of a person, accompanies and governs the person everywhere. But this statement, in modern times at least, is subject to many qualifications; and the opinions of foreign jurists upon the subject, the principal of which are collected in the treatises of Mr. Justice Story and of Dr. Francis Wharton on the Conflict of Laws, are too varying and contradictory to control the general current of the English and American authorities in favor of holding that a contract, which by the law of the place is recognized as lawfully made by a capable person, is valid everywhere, although the person would not, under the law of his domicil, be deemed capable of making it.25
Two cases in the time of Lord Hardwicke have been sometimes supposed to sustain the opposite view. The first is Ex parte Lewis, 1 Ves. Sen. 298, decided in the Court of Chancery in 1749, in which a petition, under the St. of 4 Geo. II. c. 10, that a lunatic heir of a mortgagee might be directed to convey to the mortgagor, was granted by Lord Hardwicke, on the ground of "there having been a proceeding before a proper jurisdiction, the Senate of Hamburgh, where he resided, upon which he was found non compos, and a curator or guardian appointed for him and his affairs, which proceeding the court was obliged to take notice of." But the foreign adjudication was thus taken notice of as competent evidence of the lunacy only; and that the authority of the foreign guardian was not recognized as extending to England is evident from the fact that the conveyance prayed for and ordered was from the lunatic himself. The other is  Morrison's case, in the House of Lords in 1750, for a long time principally known in England and America by the imperfect and conflicting statements of counsel arguendo in Sill v. Worswick,1 H. Bl. 677, 682; but in which, as the Scotch books of reports show, the decision really was that a committee, appointed in England, of a lunatic residing there, could not sue in Scotland upon a debt due him, but that, upon obtaining a power of attorney from the lunatic, they might maintain a suit in Scotland in his name; and Lord Hardwicke said that the law would be the same in England — evidently meaning, as appears by his own statement afterwards, that the same rule would prevail in England in the case of a foreigner who had been declared a lunatic, and as such put under guardianship in the country of his domicil. Morison's Dict. Dec. 4595. 1 Cr. & Stew. 454, 459. Thorne v. Watkins, 2 Ves. Sen. 35, 37. Both those cases, therefore, rightly understood, are in exact accordance with the later decisions, by which it is now settled in Great Britain and in the United States, that the appointment of a guardian of an infant or lunatic in one state or country gives him no authority and has no effect in another, except so far as it may influence the discretion of the courts of the latter, in the exercise of their own independent jurisdiction, to appoint the same person guardian, or to decree the custody of the ward to him. Ex parte Watkins, 2 Ves. Sen. 470. In re Houstoun, 1 Russ. 312. Johnstone v. Beattie,10 Cl. & Fin. 42. Stuart v. Bute, 9 H. L. Cas. 440; S. C. 4 Macq.1. Nugent v. Vetzera, L. R. 2 Eq. 704. Woodworth v. Spring,4 Allen 321. Story Confl. ¤ 499.26
Lord Eldon, when Chief Justice of the Common Pleas, and Chief Justice Kent and his associates in the Supreme Court of New York, held that the question whether an infant was liable to an action in the courts of his domicil, upon a contract made by him in a foreign country, depended upon the question whether by the law of that country such a contract bound an infant. Male v. Roberts, 3 Esp. 163. Thompson v. Ketcham, 8 Johns. 189.27
Mr. Westlake, who wrote in 1858, after citing the decision of Lord Eldon, well observed, "That there is not more authority on the subject may be referred to its not having been questioned;" and summed up the law of England thus: "While the English law remains as it is, it must, on principle, be taken as excluding,  in the case of transactions having their seat here, not only a foreign age of majority, but also all foreign determination of status or capacity, whether made by law or by judicial act, since no difference can be established between the cases, nor does any exist on the continent." "The validity of a contract made out of England, with regard to the personal capacity of the contractor, will be referred in our courts to the lex loci contractus; that is, not to its particular provisions on the capacity of its domiciled subjects, but in this sense, that, if good where made, the contract will be held good here, and conversely." Westlake's Private International Law, §§ 401, 402, 404.28
In a recent case, Lord Romilly, M. R., held that a legacy bequeathed by one domiciled in England to a boy domiciled with his father in Hamburgh, by the law of which boys do not become of age until twenty-two and the father is entitled as guardian to receive a legacy bequeathed to an infant, might be paid to the boy at his coming of age by the law of England, although still a minor by the law of his domicil, and in the meanwhile must be dealt with as an infant's legacy. In re Hellmann's Will, L. R.2 Eq. 363.29
The Supreme Court of Louisiana, in two cases which have long been considered leading authorities, strongly asserted the doctrine that a person was bound by a contract which he was capable by the law of the place, though not by the law of his own domicil, of making; as, for instance, in the case of a contract made by a person over twenty-one and under twenty-five years of age, in a state whose laws authorized contracts to be made at twenty-one, whereas by the laws of his domicil he was incapable of contracting under twenty-five. Baldwin v. Gray16 Martin 192,193. Saul v. His Creditors, 17 Martin 569, 597. The same doctrine was recognized as well settled in Andrews v. His Creditors, 11 La. 464, 476.30
In other cases of less note in that state, the question of personal capacity was indeed spoken of as governed by the law of the domicil. Le Breton v. Nouchet, 3 Martin 60, 70. Barrera v. Alpuente, 18 Martin 69, 70.Garnier v. Poydras, 13 La. 177, 182. But in none of them was the statement necessary to the decision. In Le Breton v. Nouchet, the point adjudged was, that where a man and woman domiciled in Louisiana  (by the law of which the wife retains her separate property) were married, with the intention of returning to Louisiana, in the Mississippi Territory, (where the rule of the common law prevailed, by which the wife's personal property became her husband's,) the law of Louisiana, in which the parties intended to continue to reside, governed their rights in the wife's property; and the further expression of an opinion that the rule would be the same if the parties intended to remain in the Mississippi Territory was purely obiter dictum, and can hardly be reconciled with later decisions of the same court.Gale v. Davis, 4 Martin 645. Saul v. His Creditors, 17 Martin 569. See also Read v. Earle, 12 Gray 423. In Barrera v. Alpuente, the case was discussed in the opinion upon the hypothesis that the capacity to receive a legacy was governed by the law of the domicil; but the same result would have followed from holding that it was governed by the law of the place where the right accrued and was sought to be enforced. In Garnier v. Poydras, the decision turned on the validity of a power of attorney executed and a judicial authorization given in France, where the husband and wife had always resided.31
In Greenwood v. Curtis, Chief Justice Parsons said, "By the common law, upon principles of national comity, a contract made in a foreign place, and to be there executed, if valid by the laws of that place, may be a legitimate ground of action in the courts of this state; although such contract may not be valid by our laws, or even may be prohibited to our citizens;" and that the Chief Justice considered this rule as extending to questions of capacity is evident from his subsequent illustration of a marriage contracted abroad between persons prohibited to intermarry by the law of their domicil. 6 Mass. 358. The validity of such marriages (except in case of polygamy, or of marriages incestuous according to the general opinion of Christendom) has been repeatedly affirmed in this Commonwealth. Medway v. Needham, 16 Mass. 157. Sutton v. Warren, 10 Met. 451. Commonwealth v. Lane, 113 Mass. 458.32
The recent decision in Sottomayor v. De Barros, 3 P. D. 1, by which Lords Justices James, Baggallay and Cotton, without referring to any of the cases that we have cited, and reversing the judgment of Sir Robert Phillimore in 2 P. D. 81, held that a  marriage in England between first cousins, Portuguese subjects, resident in England, who by the law of Portugal were incapable of intermarrying except by a Papal dispensation, was therefore null and void in England, is utterly opposed to our law; and consequently the dictum of Lord Justice Cotton, "It is a well-recognized principle of law that the question of personal capacity to enter into any contract is to be decided by the law of domicil," is entitled to little weight here.33
It is true that there are reasons of public policy for upholding the validity of marriages, that are not applicable to ordinary contracts; but a greater disregard of the lex domicilii can hardly be suggested, than in the recognition of the validity of a marriage contracted in another state, which is not authorized by the law of the domicil, and which permanently affects the relations and the rights of two citizens and of others to be born.34
Mr. Justice Story, in his Commentaries on the Conflict of Laws, after elaborate consideration of the authorities, arrives at the conclusion that "in regard to questions of minority or majority, competency or incompetency to marry, incapacities incident to coverture, guardianship, emancipation, and other personal qualities and disabilities, the law of the domicil of birth, or the law of any other acquired and fixed domicil, is not generally to govern, but the lex loci contractus aut actus, the law of the place where the contract is made, or the act done;" or as he elsewhere sums it up, "although foreign jurists generally hold that the law of the domicil ought to govern in regard to the capacity of persons to contract; yet the common law holds a different doctrine, namely, that the lex loci contractus is to govern." Story Confl. §§ 103, 241. So Chancellor Kent, although in some passages of the text of his Commentaries he seems to incline to the doctrine of the civilians, yet in the notes after wards added unequivocally concurs in the conclusion of Mr. Justice Story. 2 Kent Com. 233 note, 458, 459 & note.35
In Pearl v. Hansborough, 9 Humph. 426, the rule was carried so far as to hold that where a married woman domiciled with her husband in the State of Mississippi, by the law of which a purchase by a married woman was valid and the property purchased went to her separate use, bought personal property in Tennessee, by the law of which married women were incapable of contracting,  the contract of purchase was void and could not be enforced in Tennessee. Some authorities, on the other hand, would uphold a contract made by a party capable by the law of his domicil, though incapable by the law of the place of the contract. In re Hellmann's Will, and Saul v. His Creditors, above cited. But that alternative is not here presented. In Hill v. Pine River Bank, 45 N.H. 300, the contract was made in the state of the woman's domicil, so that the question before us did not arise and was not considered.36
The principal reasons on which continental jurists have maintained that personal laws of the domicil, affecting the status and capacity of all inhabitants of a particular class bind them wherever they may go, appear to have been that each state has the rightful power of regulating the status and condition of its subjects, and, being best acquainted with the circumstances of climate, race, character, manners and customs, can best judge at what age young persons may begin to act for themselves, and whether and how far married women may act independently of their husbands; that laws limiting the capacity of infants or of married women are intended for their protection, and cannot therefore be dispensed with by their agreement; that all civilized states recognize the incapacity of infants and married women; and that a person, dealing with either, ordinarily has notice, by the apparent age or sex, that the person is likely to be of a class whom the laws protect, and is thus put upon inquiry how far, by the law of the domicil of the person, the protection extends. On the other hand, it is only by the comity of other states that laws can operate beyond the limit of the state that makes them. I n th egreat majority of cases, especially in this country, where it is so common to travel, or to transact business through agents, or to correspond by letter, from one state to another, it is more just, as well as more convenient, to have regard to the law of theplace of thecontract, as a uniform rule operating on all contracts of thesame kind, and which thecontracting parties may be presumed to have in contemplation when making their contracts, than to require them at their peril to know thedomicil of those with whom they deal, and to ascertain the law of that domicil, however remote, which in many cases could not be don  without such delay as would greatly cripple the power of contracting abroad at all.37
As the law of another state can neither operate nor be executed in this state by its own force, but only by the comity of this state, its operation and enforcement here may be restricted by positive prohibition'of statute. A state may always by express enactment protect itself from being obliged to enforce in its courts contracts made abroad by its citizens, which are not authorized by its own laws. Under the French code, for instance, which enacts that the laws regulating the status and capacity of persons shall bind French subjects, even when living in a foreign country, a French court cannot enforce a contract made by a Frenchman abroad, which he is incapable of making by the law of France. See Westlake, §§ 399, 400.38
It is possible also that in a state where the common law prevailed in full force, by which a married woman was deemed incapable of binding herself by any contract whatever, it might be inferred that such an utter incapacity, lasting throughout the joint lives of husband and wife, must be considered as so fixed by the settled policy of the state, for the protection of its own citizens, that it could not be held by the courts of that state to yield to the law of another state in which she might undertake to contract.39
But it is not true at the present day that all civilized states recognize the absolute incapacity of married women to make contracts. The tendency of modern legislation is to enlarge their capacity in this respect, and in many states they have nearly or quite the same powers as if unmarried. In Massachusetts, even at the time of the making of the contract in question, a married woman was vested by statute with a very extensive power to carry on business by herself, and to bind herself by contracts with regard to her own property, business and earnings, and, before the bringing of thepresent action, the power had been extended so as to include the making of all kinds of contracts, with any person but her husband, as if she were unmarried. There is therefore no reason of public policy which should prevent the maintenance of this action.40
Judgment for the plaintiffs.
Supreme Court of United States.
 Mr. Cephas Brainerd and Mr. George H. Bates in support of the judgment below.6
Mr. Henry C. Miller, contra.7
It is claimed on behalf of the plaintiff that by the law of Louisiana the pre-existing liability of Pritchard as surety for the railroad company would be a valid consideration to support the promise of indemnity, notwithstanding his liability had been incurred without any previous request from the defendant. This claim is not controverted, and is fully supported by the citations from the Civil Code of Louisiana of 1870, art. 1893-1960, and the decisions of the Supreme Court of that State. Flood v. Thomas, 5 Mart. N.S. (La.) 560; N.O. Gas Co. v. Paulding, 12 Rob. (La.) 378; N.O. & Carrollton Railroad Co. v. Chapman, 8 La. Ann. 97; Keane v. Goldsmith, Haber, & Co., 12 id. 560. In the case last mentioned it is said that "the contract is, in its nature, one of personal warranty, recognized by articles 378 and 379 of the Code of Practice." And it was there held that a right of action upon the bond of indemnity accrued to the obligee, when his liability became fixed as surety by a final judgment, without payment on his part, it being the obligation of the defendants upon the bond of indemnity to pay the judgment rendered against him, or to furnish him the money with which to pay it.9
The single question presented by the record, therefore, is whether the law of New York or that of Louisiana defines and fixes the rights and obligations of the parties. If the former applies, the judgment of the court below is correct; if the latter, it is erroneous.10
The argument in support of the judgment is simple, and may be briefly stated. It is, that New York is the place of the contract, both because it was executed and delivered there, and because no other place of performance being either designated or necessarily implied, it was to be performed there; wherefore the law of New York, as the lex loci contractus, in both senses, being lex loci celebrationis and lex loci solutionis,  must apply to determine not only the form of the contract, but also its validity.11
On the other hand, the application of the law of Louisiana may be considered in two aspects: as the lex fori, the suit having been brought in a court exercising jurisdiction within its territory and administering its laws; and as the lex loci solutionis, the obligation of the bond of indemnity being to place the fund for payment in the hands of the surety, or to repay him the amount of his advance, in the place where he was bound to discharge his own liability.12
It will be convenient to consider the applicability of the law of Louisiana, first, as the lex fori, and then as the lex loci solutionis.13
1. The lex fori.14
The court below, in a cause like the present, in which its jurisdiction depends on the citizenship of the parties, adjudicates their rights precisely as should a tribunal of the State of Louisiana according to her laws; so that, in that sense, there is no question as to what law must be administered. But, in case of contract, the foreign law may, by the act and will of the parties, have become part of their agreement; and, in enforcing this, the law of the forum may find it necessary to give effect to a foreign law, which, without such adoption, would have no force beyond its own territory.15
This, upon the principle of comity, for the purpose of promoting and facilitating international intercourse, and within limits fixed by its own public policy, a civilized State is accustomed and considers itself bound to do; but, in doing so, nevertheless adheres to its own system of formal judicial procedure and remedies. And thus the distinction is at once established between the law of the contract, which may be foreign, and the law of the procedure and remedy, which must be domestic and local. In respect to the latter the foreign law is rejected; but how and where to draw the line of precise classification it is not always easy to determine.16
The principle is, that whatever relates merely to the remedy and constitutes part of the procedure is determined by the law of the forum, for matters of process must be uniform in the courts of the same country; but whatever goes to the substance  of the obligation and affects the rights of the parties, as growing out of the contract itself, or inhering in it or attaching to it, is governed by the law of the contract.17
The rule deduced by Mr. Wharton, in his Conflict of Laws, as best harmonizing the authorities and effecting the most judicious result, and which was cited approvingly by Mr. Justice Hunt in Scudder v. Union National Bank, 91 U.S. 406, is, that "Obligations in respect to the mode of their solemnization are subject to the rule locus regit actum; in respect to their interpretation, to the lex loci contractus; in respect to the mode of their performance, to the law of the place of their performance. But the lex fori determines when and how such laws, when foreign, are to be adopted, and, in all cases not specified above, supplies the applicatory law." This, it will be observed, extends the operation of the lex fori beyond the process and remedy, so as to embrace the whole of that residuum which cannot be referred to other laws. And this conclusion is obviously just; for whatever cannot, from the nature of the case, be referred to any other law, must be determined by the tribunal having jurisdiction of the litigation, according to the law of its own locality.18
Whether an assignee of a chose in action shall sue in his own name or that of his assignor is a technical question of mere process, and determinable by the law of the forum; but whether the foreign assignment, on which the plaintiff claims is valid at all, or whether it is valid against the defendant, goes to the merits and must be decided by the law in which the case has its legal seat. Wharton, Conflict of Laws, sects. 735, 736. Upon that point Judge Kent, in Lodge v. Phelps, 1 Johns. (N.Y.) Cas. 139, said: "If the defendant has any defence authorized by the law of Connecticut, let him show it, and he will be heard in one form of action as well as in the other."19
It is to be noted, however, as an important circumstance, that the same claim may sometimes be a mere matter of process, and so determinable by the law of the forum, and sometimes a matter of substance going to the merits, and therefore determinable by the law of the contract. That is illustrated in the application of the defence arising upon the Statute of Limitations. In the courts of England and America, that  defence is governed by the law of the forum, as being a matter of mere procedure; while in continental Europe the defence of prescription is regarded as going to the substance of the contract, and therefore as governed by the law of the seat of the obligation. "According to the true doctrine," says Savigny, "the local law of the obligation must determine as to the term of prescription, not that of the place of the action; and this rule, which has just been laid down in respect to exceptions in general, is further confirmed, in the case of prescription, by the fact that the various grounds on which it rests stand in connection with the substance of the obligation itself." Private Inter. Law, by Guthrie, 201. In this view Westlake concurs. Private Inter. Law (ed. 1858), sect. 250. He puts it, together with the case of a merger in another cause of action, the occurrence of which will be determined by the law of the former cause, Bryans v. Dunseth, 1 Mart. N.S. (La.) 412, as equal instances of the liability to termination inherent by the lex contractus. But notwithstanding the contrary doctrine of the courts of England and this country, when the Statute of Limitations of a particular country not only bars the right of action, but extinguishes the claim or title itself, ipso facto, and declares it a nullity, after the lapse of the prescribed period, and the parties have been resident within the jurisdiction during the whole of that period, so that it has actually and fully operated upon the case, it must be held, as it was considered by Mr. Justice Story, to be an extinguishment of the debt, wherever an attempt might be made to enforce it. Conflict of Laws, sect. 582. That rule, as he says, has in its support the direct authority of this court in Shelby v. Guy, 11 Wheat. 361-371; its correctness was recognized by Chief Justice Tindal in Huber v. Steiner, 2 Bing. N.C. 202, 211; and it is spoken of by Lord Brougham in Don v. Lippmann, 5 Cl. & Fin. 1, 16, as "the excellent distinction taken by Mr. Justice Story." Walworth v. Routh, 14 La. Ann. 205. The same principle was applied by the Supreme Court of Ohio in the case of the P.C. & St. L. Railway Co. v. Hine's Admx., 25 Ohio St. 629, where it was held, that under the act which requires compensation for causing death by wrongful act, neglect, or default, and gives a right of  action, provided such action shall be commenced within two years after the death of such deceased person, the proviso is a condition qualifying the right of action, and not a mere limitation on the remedy. Bonte v. Taylor, 24 id. 628.20
The principle that what is apparently mere matter of remedy in some circumstances, in others, where it touches the substance of the controversy, becomes matter of right, is familiar in our constitutional jurisprudence in the application of that provision of the Constitution which prohibits the passing by a State of any law impairing the obligation of contracts. For it has been uniformly held that "any law which in its operation amounts to a denial or obstruction of the rights accruing by a contract, though professing to act only on the remedy, is directly obnoxious to the prohibition of the Constitution." McCracken v. Hayward, 2 How. 608, 612; Cooley, Const. Lim. 285.21
Hence it is that a vested right of action is property in the same sense in which tangible things are property, and is equally protected against arbitrary interference. Whether it springs from contract or from the principles of the common law, it is not competent for the legislature to take it away. A vested right to an existing defence is equally protected, saving only those which are based on informalities not affecting substantial rights, which do not touch the substance of the contract and are not based on equity and justice. Cooley, Const. Lim. 362-369.22
The general rule, as stated by Story, is that a defence or discharge, good by the law of the place where the contract is made or is to be performed, is to be held of equal validity in every other place where the question may come to be litigated. Conflict of Laws, sect. 331. Thus infancy, if a valid defence by the lex loci contractus, will be a valid defence everywhere. Thompson v. Ketcham, 8 Johns. (N.Y.) 189; Male v. Roberts, 3 Esp. 163. A tender and refusal, good by the same law, either as a full discharge or as a present fulfilment of the contract, will be respected everywhere. Warder v. Arell, 2 Wash. (Va.) 282. Payment in paper-money bills, or in other things, if good by the same law, will be deemed a sufficient payment everywhere. 1 Brown, Ch. 376; Searight v. Calbraith,  4 Dall. 325; Bartsch v. Atwater, 1 Conn. 409. And, on the other hand, where a payment by negotiable bills or notes is, by the lex loci, held to be conditional payment only, it will be so held even in States where such payment under the domestic law would be held absolute. So, if by the law of the place of a contract equitable defences are allowed in favor of the maker of a negotiable note, any subsequent indorsement will not change his rights in regard to the holder. The latter must take it cum onere. Evans v. Gray, 12 Mart. (La.) 475; Ory v. Winter, 4 Mart. N.S. (La.) 277; Chartres v. Cairnes, id. 1; Story, Conflict of Laws, sect. 332.23
On the other hand, the law of the forum determines the form of the action, as whether it shall be assumpsit, covenant, or debt. Warren v. Lynch, 5 Johns. (N.Y.) 239; Andrews v. Herriot, 4 Cow. (N.Y.) 508; Trasher v. Everhart, 3 Gill & J. (Md.) 234; Adams v. Kers, 1 Bos. & Pul. 360; Bank of the United States v. Donally, 8 Pet. 361; Douglas v. Oldham, 6 N.H. 150. In Le Roy v. Beard, 8 How. 451, where it was held that assumpsit and not covenant was the proper form of action brought in New York upon a covenant executed and to be performed in Wisconsin, and by its laws sealed as a deed, but which in the former was not regarded as sealed, it was said by this court, that it was so decided "without impairing at all the principle, that in deciding on the obligation of the instrument as a contract, and not the remedy on it elsewhere, the law of Wisconsin, as the lex loci contractus, must govern." It regulates all process, both mesne and final. Ogden v. Saunders, 12 Wheat. 213; Mason v. Haile, id. 370; Beers v. Haughton, 9 Pet. 329; Von Hoffman v. City of Quincy, 4 Wall. 535. It also may admit, as a part of its domestic procedure, a set-off or compensation of distinct causes of action between the parties to the suit, though not admissible by the law of the place of the contract. Story, Conflict of Laws, sect. 574; Gibbs v. Howard, 2 N.H. 296; Ruggles v. Keeler, 3 Johns. (N.Y.) 263. But this is not to be confounded, as it was in the case of Second National Bank of Cincinnati v. Hemingray, 31 Ohio St. 168, with that of a limited negotiability, by which the right of set-off between the original parties is preserved as part of the law of the contract, notwithstanding an assignment. The rules of  evidence are also supplied by the law of the forum. Wilcox v. Hunt, 13 Pet. 378; Yates v. Thomson, 3 Cl. & Fin. 544; Bain v. Whitehaven, &c.; Railway Co., 3 H. of L. Cas. 1; Don v. Lippmann, 5 Cl. & Fin. 1. In Yates v. Thomson, supra, it was decided by the House of Lords that in a suit in a Scotch court, to adjudge the succession to personalty of a decedent domiciled in England, where it was admitted that the English law governed the title, nevertheless it was proper to receive in evidence, as against a will of the decedent, duly probated in England, a second will which had not been proved there, and was not receivable in English courts as competent evidence, because such a paper according to Scottish law was admissible. In Hoadley v. Northern Transportation Co., 115 Mass. 304, it was held that if the law of the place, where a contract signed only by the carrier is made for the carriage of goods, requires evidence other than the mere receipt by the shipper to show his assent to its terms, and the law of the place where the suit is brought presumes conclusively such assent from acceptance without dissent, the question of assent is a question of evidence, and is to be determined by the law of the place where the suit is brought. In a suit in Connecticut against the indorser on a note made and indorsed in New York, it was held that parol evidence of a special agreement, different from that imputed by law, would be received in defence, although by the law of the latter State no agreement different from that which the law implies from a blank indorsement could be proved by parol. Downer v. Cheseborough, 36 Conn. 39. And upon the same principle it has been held that a contract, valid by the laws of the place where it is made, although not in writing, will not be enforced in the courts of a country where the Statute of Frauds prevails, unless it is put in writing. Leroux v. Brown, 12 C.B. 801. But where the law of the forum and that of the place of the execution of the contract coincide, it will be enforced, although required to be in writing by the law of the place of performance, as was the case of Scudder v. Union National Bank, 91 U.S. 406, because the form of the contract is regulated by the law of the place of its celebration, and the evidence of it by that of the forum.24
Williams v. Haines, 27 Iowa, 251, was an action upon a note  executed in Maryland, and, so far as appears from the report, payable there, where the parties thereto then resided, and which was a sealed instrument, according to the laws of that State, in support of which those laws conclusively presumed a valid consideration. By the laws of Iowa, to such an instrument the want of consideration was allowed to be proved as a defence. It was held by the Supreme Court of that State, in an opinion delivered by Chief Justice Dillon, that the law of Iowa related to the remedy merely, without impairing the obligation of the contract, and, as the lex fori, must govern the case. He said: "Respecting what shall be good defences to actions in this State, its courts must administer its own laws and not those of other States. The common-law rules do not so inhere in the contract as to have the portable quality ascribed to them by the plaintiff's counsel, much less can they operate to override the plain declaration of the legislative will." The point of this decision is incorporated by Mr. Wharton into the text of his Treatise on the Conflict of Laws, sect. 788, and the case itself is referred to in support of it. He deduces the same conclusion from those cases, already referred to, which declare that assumpsit is the only form of action that can be brought upon an instrument which is not under seal, according to the laws of the forum, although by the law of the place where it was executed, or was to be performed, it would be regarded as under seal, in which debt or covenant would lie, on the ground that a plea of want or failure of consideration is recognized as a defence in all actions of assumpsit. Wharton, Conflict of Laws, sect. 747.25
If the proposition be sound, its converse is equally so; and the law of the place where a suit may happen to be brought may forbid the impeachment of a contract, for want of a valid consideration, which, by the law of the place of the contract, might be declared invalid on that account.26
We cannot, however, accept this conclusion. The question of consideration, whether arising upon the admissibility of evidence or presented as a point in pleading, is not one of procedure and remedy. It goes to the substance of the right itself, and belongs to the constitution of the contract. The difference between the law of Louisiana and that of New York, presented  in this case, is radical, and gives rise to the inquiry, what, according to each, are the essential elements of a valid contract, determinable only by the law of its seat; and not that other, what remedy is provided by the law of the place where the suit has been brought to recover for the breach of its obligation.27
On this point, what was said in The Gaetano & Maria, 7 P.D. 137, is pertinent. In that case the question was whether the English law, which was the law of the forum, or the Italian law, which was the law of the flag, should prevail, as to the validity of a hypothecation of the cargo by the master of a ship. It was claimed that because the matter to be proved was, whether there was a necessity which justified it, it thereby became a matter of procedure, as being a matter of evidence. Lord Justice Brett said: "Now, the manner of proving the facts is matter of evidence, and, to my mind, is matter of procedure, but the facts to be proved are not matters of procedure; they are matters with which the procedure has to deal."28
It becomes necessary, therefore, to consider the applicability of the law of Louisiana as —29
2. The lex loci solutionis.30
The phrase lex loci contractus is used, in a double sense, to mean, sometimes, the law of the place where a contract is entered into; sometimes, that of the place of its performance. And when it is employed to describe the law of the seat of the obligation, it is, on that account, confusing. The law we are in search of, which is to decide upon the nature, interpretation, and validity of the engagement in question, is that which the parties have, either expressly or presumptively, incorporated into their contract as constituting its obligation. It has never been better described than it was incidentally by Mr. Chief Justice Marshall in Wayman v. Southard, 10 Wheat. 1, 48, where he defined it as a principle of universal law, — "The principle that in every forum a contract is governed by the law with a view to which it was made." The same idea had been expressed by Lord Mansfield in Robinson v. Bland, 2 Burr. 1077, 1078. "The law of the place," he said, "can never be the rule where the transaction is entered into with an express view to the law of another country, as the rule by which it is to be governed." And in Lloyd v. Guibert, Law Rep. 1 Q.B. 115, 120,  in the Court of Exchequer Chamber, it was said that "It is necessary to consider by what general law the parties intended that the transaction should be governed, or rather, by what general law it is just to presume that they have submitted themselves in the matter." Le Breton v. Miles, 8 Paige (N.Y.), 261.31
It is upon this ground that the presumption rests, that the contract is to be performed at the place where it is made, and to be governed by its laws, there being nothing in its terms, or in the explanatory circumstances of its execution, inconsistent with that intention.32
So, Phillimore says: "It is always to be remembered that in obligations it is the will of the contracting parties, and not the law, which fixes the place of fulfilment — whether that place be fixed by express words or by tacit implication — as the place to the jurisdiction of which the contracting parties elected to submit themselves." 4 Int. Law, 469.33
The same author concludes his discussion of the particular topic as follows: "As all the foregoing rules rest upon the presumption that the obligor has voluntarily submitted himself to a particular local law, that presumption may be rebutted, either by an express declaration to the contrary, or by the fact that the obligation is illegal by that particular law, though legal by another. The parties cannot be presumed to have contemplated a law which would defeat their engagements." 4 Int. Law, sect. DCLIV. pp. 470, 471.34
This rule, if universally applicable, which perhaps it is not, though founded on the maxim, ut res magis valeat, quam pereat, would be decisive of the present controversy, as conclusive of the question of the application of the law of Louisiana, by which alone the undertaking of the obligor can be upheld.35
At all events, it is a circumstance, highly persuasive in its character, of the presumed intention of the parties, and entitled to prevail, unless controlled by more express and positive proofs of a contrary intent.36
It was expressly referred to as a decisive principle in Bell v. Packard, 69 Me. 105, although it cannot be regarded as the foundation of the judgment in that case. Milliken v. Pratt, 125 Mass. 374.37
 If now we examine the terms of the bond of indemnity, and the situation and relation of the parties, we shall find conclusive corroboration of the presumption, that the obligation was entered into in view of the laws of Louisiana.38
The antecedent liability of Pritchard, as surety for the railroad company on the appeal bond, was confessedly contracted in that State, according to its laws, and it was there alone that it could be performed and discharged. Its undertaking was, that Pritchard should, in certain contingencies, satisfy a judgment of its courts. That could be done only within its territory and according to its laws. The condition of the obligation, which is the basis of this action, is, that McComb and Norton, the obligors, shall hold harmless and fully indemnify Pritchard against all loss or damage arising from his liability as surety on the appeal bond. A judgment was, in fact, rendered against him on it in Louisiana. There was but one way in which the obligors in the indemnity bond could perfectly satisfy its warranty. That was, the moment the judgment was rendered against Pritchard on the appeal bond, to come forward in his stead, and, by payment, to extinguish it. He was entitled to demand this before any payment by himself, and to require that the fund should be forthcoming at the place where otherwise he could be required to pay it. Even if it should be thought that Pritchard was bound to pay the judgment recovered against himself, before his right of recourse accrued upon the bond of indemnity, nevertheless he was entitled to be reimbursed the amount of his advance at the same place where he had been required to make it. So that it is clear, beyond any doubt, that the obligation of the indemnity was to be fulfilled in Louisiana, and, consequently, is subject, in all matters affecting its construction and validity, to the law of that locality.39
This construction is abundantly sustained by the authority of judicial decisions in similar cases.40
In Irvine v. Barrett, 2 Grant's (Pa.) Cas. 73, it was decided that where a security is given in pursuance of a decree of a court of justice, it is to be construed according to the intention of the tribunal which directed its execution, and, in contemplation of law, is to be performed at the place where the court  exercises its jurisdiction; and that a bond given in another State, as collateral to such an obligation, is controlled by the same law which controls the principal indebtedness. In the case of Penobscot & Kennebec Railroad Co. v. Bartlett, 12 Gray (Mass.), 244, the Supreme Judicial Court of Massachusetts decided that a contract made in that State to subscribe to shares in the capital stock of a railroad corporation established by the laws of another State, and having their road and treasury there, is a contract to be performed there, and is to be construed by the laws of that State. In Lanusse v. Barker, 3 Wheat. 101, 146, this court declared that "where a general authority is given to draw bills from a certain place, on account of advances there made, the undertaking is to replace the money at that place."41
The case of Cox v. United States, 6 Pet. 172, was an action upon the official bond of a navy agent. The sureties contended that the United States were bound to divide their action, and take judgment against each surety only for his proportion of the sum due, according to the laws of Louisiana, considering it a contract made there, and to be governed in this respect by the law of that State. The court, however, said: "But admitting the bond to have been signed at New Orleans, it is very clear that the obligations imposed upon the parties thereby looked for its execution to the city of Washington. It is immaterial where the services as navy agent were to be performed by Hawkins. His accountability for non-performance was to be at the seat of government. He was bound to account, and the sureties undertook that he should account for all public moneys received by him, with such officers of the government of the United States as are duly authorized to settle and adjust his accounts. The bond is given with reference to the laws of the United States on that subject. And such accounting is required to be with the Treasury Department at the seat of government; and the navy agent is bound by the very terms of the bond to pay over such sum as may be found due to the United States on such settlement; and such paying over must be to the Treasury Department, or in such manner as shall be directed by the secretary. The bond is, therefore, in every point of view in which  it can be considered, a contract to be executed at the city of Washington, and the liability of the parties must be governed by the rules of the common law." This decision was repeated in Duncan v. United States, 7 Pet. 435.42
These cases were relied on by the Supreme Court of New York in Commonwealth of Kentucky v. Bassford, 6 Hill (N.Y.), 526. That was an action upon a bond executed in New York conditioned for the faithful performance of the duties enjoined by a law of Kentucky authorizing the obligees to sell lottery tickets for the benefit of a college in that State. It was held that the stipulations of the bond were to be performed in Kentucky, and that, as it was valid by the laws of that State, the courts of New York would enforce it, notwithstanding it would be illegal in that State.43
Boyle v. Zacharie, 6 Pet. 635, is a direct authority upon the point. There Zacharie and Turner were resident merchants at New Orleans, and Boyle at Baltimore. The latter sent his ship to New Orleans, consigned to Zacharie and Turner, where she arrived, and, having landed her cargo, the latter procured a freight for her to Liverpool. When she was ready to sail she was attached by process of law at the suit of certain creditors of Boyle, and Zacharie and Turner procured her release by becoming security for Boyle on the attachment. Upon information of the facts, Boyle promised to indemnify them for any loss they might sustain on that account. Judgment was rendered against them on the attachment bond, which they were compelled to pay, and to recover the amount so paid they brought suit in the Circuit Court for Maryland against Boyle upon his promise of indemnity. A judgment was rendered by confession in that cause, and a bill in equity was subsequently filed to enjoin further proceedings on it, in the course of which various questions arose, among them, whether the promise of indemnity was a Maryland or a Louisiana contract. Mr. Justice Story, delivering the opinion of the court, said: "Such a contract would be understood by all parties to be a contract made in the place where the advance was to be made, and the payment, unless otherwise stipulated, would also be understood to be made there;" "that the contract would clearly refer for its execution to Louisiana."44
 The very point was also decided by this court in Bell v. Bruen, 1 How. 169. That was an action upon a guaranty written by the defendant in New York, addressed to the plaintiffs in London, who, at the latter place, had made advances of a credit to Thorn. The operative language of the guaranty was, "that you may consider this, as well as any and every other credit you may open in his favor, as being under my guaranty." The court said: "It was an engagement to be executed in England, and must be construed and have effect according to the laws of that country," citing Bank of the United States v. Daniel, 12 Pet. 54. As the money was advanced in England, the guaranty required that it should be replaced there, and that is the precise nature of the obligation in the present case. Pritchard could only be indemnified against loss and damage on account of his liability on the appeal bond, by having funds placed in his hands in Louisiana wherewith to discharge it, or by being repaid there the amount of his advance. To the same effect is Woodhull v. Wagner, Baldw. 296.45
We do not hesitate, therefore, to decide that the bond of indemnity sued on was entered into with a view to the law of Louisiana as the place for the fulfilment of its obligation; and that the question of its validity, as depending on the character and sufficiency of the consideration, should be determined by the law of Louisiana, and not that of New York. For error in its rulings on this point, consequently, the judgment of the Circuit Court is reversed, with directions to grant a new trial.46
New trial ordered.
Circuit Court of Appeals, Second Circuit.
D. Roger Englar and Bigham, Englar, Jones & Houston, all of New York City, Burke & Desmond, of Buffalo, N. Y., Henry N. Longley, of New York City, Thomas C. Burke, of Buffalo, N. Y. and Ezra G. Benedict Fox, of New York City, for appellants.7
Theodore C. Robinson and Holding, Duncan & Leckie, all of Cleveland, Ohio, for appellee.8
Before L. HAND, CHASE, and MACK, Circuit Judges.9
The libellants at Duluth shipped a parcel of wheat upon two ships of the respondent and received in exchange bills of lading, Duluth to Montreal, "with transshipment at Port Colbourne, Ontario." These contained an exception for "dangers of navigation, fire and collision," but nothing further which is here relevant. The respondent exercised its right of reshipment, unladed the wheat at Port Colbourne, stored it in an elevator, and reladed thirty-five thousand bushels in another ship, the Advance, belonging to one Webb, chartered by the respondent's agent, the Hall Shipping Company, for that purpose. This ship safely carried her cargo until she reached the entrance to the Cornwall Canal in the St. Lawrence River, where she took the ground, stove in her bottom and sank. The suit is for the resulting damage to the wheat.11
The respondent defended on the ground that the strand, not being due to any fault in management, was a danger of navigation. Failing this, it relied upon the Harter Act (46 USCA §§ 190-195) and the Canadian Water-Carriage of Goods Act (9-10 Edward VII, Chap. 81), which covers among other ships those "carrying goods from any port in  Canada to any other port in Canada" (section 3). It requires every bill of lading "relating to the carriage of goods from any place in Canada to any place outside Canada" to recite that the shipment is subject to the act (section 5), and, like section three of the Harter Act (46 USCA § 192) provides that "if the owner of any ship transporting merchandise or property from any port in Canada exercises due diligence to make the ship in all respects seaworthy and properly manned, equipped and supplied, neither the ship, nor the owner, agent or charterer" shall be liable "for faults or errors in navigation or in the management of the ship" (section 6). The respondent tried to prove that the Advance was seaworthy, and was therefore within both statutes. Finally it argued that it was not in any event a through carrier, and that its liability therefore ended upon delivery of the wheat on board the Advance at Port Colbourne.12
To begin with the last defense, we think it clear that the respondent was a through carrier. It relies upon those cases in which one railway, connecting with another at its terminus, gives a through bill of lading, sometimes with, sometimes without, stipulation that liability shall cease at delivery. In such a case the receiving carrier is generally not liable beyond its own line. Myrick v. Michigan Central R. Co., 107 U. S. 102, 1 S. Ct. 425, 27 L. Ed. 325; Penn. R. Co. v. Jones, 155 U. S. 333, 15 S. Ct. 136, 39 L. Ed. 176. The case at bar is not like that; it is true that the two ships which first lifted the wheat could not go through the Welland Canal, and that transshipment was inevitable from the outset, but it did not follow that the respondent would not carry all the wheat to Montreal in its own ships; and so indeed it did except about 55,000, out of 300,000, bushels. Four out of the six vessels used belonged to it, and it chartered the two others, of which the Advance was one, apparently for its convenience. It was liable for her miscarriage, quite as though it had owned her [Colton v. N. Y. & Cuba Mail S. S. Co., 27 F.(2d) 671 (C. C. A. 2)]; she was its selection, the means which it used to perform its obligation.13
The parties are indeed at odds as to whether the respondent really did charter the Advance. On the issue of through carriage the libellants insist that the respondent is to be charged because of her; on that arising under the Canadian act (section 6), they say that the respondent was not a charterer. The respondent takes the reverse position in each issue. We decide as to both that the respondent was a charterer. The ship was, as we have said, chartered by the Hall Shipping Company, a corporation which had secured the original space for the libellants, but which quite generally acted for the respondent in the details of its business. The evidence is too plain for question that it was for the respondent that it fixed the Advance to complete the carriage, and the respondent became as much a principal, though undisclosed, as though its own officers had struck the bargain. The fact that the libellants at the outset paid a commission to the Hall Company for securing the space at Duluth, might, if it stood alone, justify us in concluding that it was the libellants' agent, but the answer, the interrogatories, and the testimony show beyond shadow of question that this was not the case.14
However, the respondent says that even though a through carrier, it was not a common carrier as to the Advance, whose cargo occupied the full reach of her holds. The issue is important primarily because upon it depends the burden of proof to show negligence in navigation; and we are content for argument to assume that she was a private carrier, even though the respondent was generally engaged in the business of common carriage. We think that the libellants have carried the burden. It is extremely unlikely that the Advance should have taken the ground where and when she did, unless the local pilot then in charge had been negligent. At the trial he was not called, and the master, who was with him on the bridge, had no explanation except somewhat faintly to suggest that the ship had been carried off to port by the river currents. He had already cautioned the pilot that he was keeping up too far to the left, and when the ship lost way, she sagged over to port, and her bottom on that side was impaled upon some rock or lost anchor, which stove a small hole through her planks. We cannot hold it good navigation to let a ship go ashore which in calm water is passing through a well-known channel, subject only to those currents which are, or should be, known to the navigator. To be sure, such things can happen; there are twists of current, like those of the sea, against which prudence will not defend, but in the case at bar their existence rests merely in supposition. We know that the ship was out of position, that her loss of way was to be expected, that ships commonly pass through the channel without injury, that nothing unusual here interfered with navigation.  This makes a situation from which we must infer fault unless good proof exculpates the navigator. There is none, and indeed the master remained in doubt even at the trial as to whether to blame the pilot. We cannot therefore agree with the finding of the District Judge that the strand was a "danger of navigation"; on the contrary, we think that the libellants have shown negligence.15
We shall assume arguendo that section three of the Harter Act (46 USCA § 192) did not cover the case; verbally it only includes "vessels transporting merchandise or property to or from any port in the United States." The point is not raised in any event, since there is no proof of the seaworthiness of the vessels clearing from Duluth, which lifted the wheat. If the Advance is to be identified with these, the substitution being ignored, at least all three ships concerned must be shown to be seaworthy. Quite other considerations control as to section six of the Canadian act. We pass the point that the bills of lading did not incorporate that statute; section five only requires such a recital in case of a shipment from a Canadian, to an outside, port, and apparently even in those cases it is only directory. Verbally at least section six covered the situation; the Advance was "transporting goods" "from" a Canadian port, and the respondent was the charterer, as we have said.16
The important question is whether we should look to Canadian law at all. Here is a contract of carriage, made in Minnesota without any relevant exceptions, to be performed partly in the United States and partly in Canada; the carrier fails in performing that part of it which is to take place in Canada; he does not safely transport the grain from the entrance of the canal to Montreal. The law of the place of that performance excuses him for those faults in navigation which have caused the loss. Does that law control? Liverpool, etc., Co. v. Phenix Ins. Co., 129 U. S. 397, 9 S. Ct. 469, 32 L. Ed. 788, decided that the validity of a provision in a contract of carriage, limiting the carrier's common-law duty, was to be determined by the law of the place where the contract was made, and this is well-settled law (section 366, Tentative Restatement No. 4, Conflict of Laws; American Law Institute), even when the parties expressly stipulate that all questions shall be decided according to some foreign law, which would require a different result (Oceanic Steam Nav. Co. v. Corcoran (C. C. A. 2) 9 F.(2d) 724, 57 A. L. R. 163). It is of course only an instance of the usual rule that the law of the place where promises are made determines whether they create a contract (section 353, Op. Cit.); that law alone attaches any legal consequences to acts within its territory.17
On the other hand, it is always said that as to matters of performance the law of the place of performance controls (Andrews v. Pond, 13 Pet. 65, 78, 10 L. Ed. 61; Scudder v. Union National Bank, 91 U. S. 408, 23 L. Ed. 245; Pritchard v. Norton, 106 U. S. 124, 1 S. Ct. 102, 27 L. Ed. 104; Hall v. Cordell, 142 U. S. 116, 12 S. Ct. 154, 35 L. Ed. 956), though in application the boundaries of this doctrine are not easy to find, as the last two cases cited illustrate very well. An exchange of mutual promises, or whatever other acts may create a contract for future performance, do not put the obligor under any immediate constraint, except so far as the doctrine of anticipatory breach demands. A present obligation arises only in the sense that it is then determined that when the time for performance arrives, his conduct shall not be open to his choice. For the present nothing is required of him; he can commit no fault and incur no liability. When the time comes for him to perform, if he fails, the law requires him to give the equivalent of the neglected performance; that compulsion is the sanction imposed by the state and the measure of the obligation. The default must indeed be at the place of performance, but the promisor need not himself be there, nor may he there have any property to respond. In such cases it is impossible to say that any liability arises under the law of that place; yet it would be exceedingly inconvenient to hold that it depended upon the law of the place where the promisor chanced to be at the time of performance, especially if such a doctrine were extended to all places where he has any property. In the interest of certainty and uniformity there must be some definite place fixed whose law shall control, wherever the suit arises. Whether the place of performance is chosen because of the likelihood that the obligor will be there present at the time of performance, or — what is nearly the same thing — because the agreement presupposes that he shall be, is not important. All we need say here is that the same law which determines what liabilities shall arise upon nonperformance, must determine any excuses for nonperformance, which are no more than exceptions to those liabilities.18
The authorities in general support this view; as, for example, in the case of a moratorium  (Rouquette v. Overmann, L. R. 10 Q. B. 525); of payment upon a forged indorsement (Kessler v. Armstrong Cork Co., 158 F. 744 (C. C. A. 2); Belestin v. First National Bank, 177 Mo. App. 300, 164 N. Y. S. 160); of the delivery of a note as payment (Tarbox v. Childs, 165 Mass. 408, 43 N. E. 124; Gilman v. Stevens, 63 N. H. 342, 1 A. 202, on the facts, though not on the reasoning); of payment in one currency or another (Anonymous, 1 Brown C. C. 376; Benners v. Clemens, 58 Pa. 24); of who is the proper payee (Graham v. First Nat. Bank, 84 N. Y. 393, 38 Am. Rep. 528), or consignee (Yokohama Specie Bank v. U. S. Fidelity & Guaranty Co., 123 Wash. 387, 212 P. 564, 216 P. 851); of the time of grace on commercial paper (Bowen v. Newell, 13 N. Y. 290, 64 Am. Dec. 550). In the case at bar, the Canadian law says that performance of the contract of carriage, as respects navigation, shall be excused if the owner uses due care to examine his ship and make her fit for her voyage, to man and victual her and the like. The conduct so specified is thus made an excuse for his failure to carry the goods safely to their destination as he has promised to do. That is exactly like any other excuse for such failure; delay is as much a breach as default; payment not specified is no payment; delivery to another, no delivery.19
It is indeed possible to say that any excuse for performance is a condition upon the undertaking, written into, and so a part of, the original promise. Courts which have insisted that the parties must be found in some way to have selected foreign law to control their rights, have so reasoned as to the law of the place of performance. We think that the imputation of any such intent is a fiction. It is quite true that civilized law will generally make part of their obligations whatever the parties choose to incorporate into their promises, foreign law like anything else. It is also true that if the parties have specified that performance shall be subject to certain excuses, the law of the place of performance will accept those excuses; that is no more than saying that the contract defined the performance. But the parties cannot select the law which shall control, except as it becomes a term in the agreement, like the by-laws of a private association. When they have said nothing, as here, the local law determines what shall excuse performance ex proprio vigore; the parties do nothing about it. An American contract carries with it none of the immunity of the sovereign which created it; Canadian law reaches it and Canadian contracts indifferently.20
The English cases dealing with the Harter Act (Dobell & Co. v. S. S. Rossmore Co.,  2 Q. B. 408, [C. A.]; Rowson v. Atlantic Transport Co.,  2 K. B. 666 [C. A.]), are not contrary. So far as written into the documents the act became a part of the contract, but no further. In no case did it appear that the default in performance took place in the United States, where alone section three of the Harter Act (46 USCA § 192) was in force. We have no reason to suppose that in such an event an English court would refuse to accept the excuse. Nor would it make any difference though we ourselves enforced the act outside the United States in cases where it was not incorporated in the shipping documents. Whatever might be thought of that as law, if we did it, it would not affect the propriety of our recognizing the Canadian act here. Were it not for section three of our own Harter Act (46 USCA § 192), we might indeed have to consider whether such an excuse for performance would so far answer our ideas of sound policy that we should accept the Canadian statute. But that statute was apparently drafted closely to conform to our own, and we can of course have no compunctions in taking it as the model of those liabilities which we will recognize. For this reason a provision in the bill of lading incorporating the Canadian act by reference or at large, would not fall under the ban of Liverpool, etc., Co. v. Phenix Insurance Co., or The Kensington, 183 U. S. 263, 22 S. Ct. 102, 46 L. Ed. 190. On the other hand, the bill of lading might have expressly repudiated both the Harter Act and its Canadian progeny, and fixed the liability of the carrier as at common law or even as that of an unconditional insurer. We will not say that either statute would have prevented the enforcement of those stipulations, but this would be because under Canadian law the stipulated performance would then have been so modified that the statute did not excuse it, and because that result did not offend our local policy. When the parties have not so expressed themselves performance and excuses for nonperformance depend upon Canadian law. We conclude that if the Advance was in fact seaworthy, the respondent was excused by virtue of the Canadian statute, and in that event we need not consider the issue of due diligence.21
She was an old ship, built in 1884, and built over in 1900; how far, does not appear.  She had lain in the mud during the winter of 1926-27; in the following spring Webb bought her for three thousand dollars, spent about six hundred dollars on her, and used her on three summer voyages on the Lakes. She had been pretty thoroughly examined in June, though not in dry dock, and got a classification of ninety in the American Shipping Bureau, this being the lowest for dry cargoes. Again examined in August to secure a grain classification, she was certified for three months, and was sunk while sailing under this certificate. At once thereafter she went to dry dock, where for the first time the outside of her planking below the water line could be seen. This proved worn and broomed, but save for the broken planks, was not renewed and without substantial repairs her classification was extended till June, 1928. For the next season considerable repair was made upon her.22
The planking had originally been five inches thick and was worn down a little over an inch in places; at one spot it had been gouged out over two inches, but in general enough thickness remained to resist the ordinary shocks of her service. At least there was plenty of testimony on which the District Judge might so find, as he did. The test of seaworthiness is obviously elastic, and it is idle for us to speculate on the written evidence, whatever we might have thought had we seen all the witnesses. Perhaps it is especially true of opinion evidence that the personal equation counts; a pragmatic, self-confident person may make an admirable showing in a record, who, if one saw him in the flesh, would appear shallow, pretentious and unreliable. We can do little more than say that such an old boat as the Advance may well be within the limits of safety for work of this sort, though her planks are worn as much as these were. Many a steamer goes about her business for over forty years, if she be kept up to it. We cannot suppose that the Canadian inspectors, having her on dry dock after the accident, would have extended her grain rating without further repairs, if she had not been reasonably fit.23
The libellants have, however, raised a defect in construction which calls for new proof that we cannot satisfactorily take ourselves. Apparently the Advance had five pumps; three working direct from the boiler, and two from the engine. Those fed by the boiler had no suctions to the cargo hold, which was ordinarily expected to drain into the engine compartment by a valve in the bulkhead. This meant that, if the valve was closed, the cargo hold could be pumped only from the engine room, and that, if this was flooded, it could not be cleared at all. The only evidence in the record is that this made the ship unseaworthy, and while we are not satisfied that this conclusion must inevitably be true, we see no way to disregard the undisputed testimony of two qualified witnesses. The issue was apparently allowed to go by default, and we must send back the case to determine whether the arrangement and condition of the pumps, bulkheads and valves were such as to make the ship seaworthy. On the new trial no evidence is to be received which is not pertinent to this, and the respondent has the burden upon it.24
The libellants also laid a cause of action in trover, charging the respondent with conversion in mixing their grain with that of others in the elevators at Colbourne. This, if a tort, was apparently committed on the land at the moment when the grain, being sucked out of the original ships, was drawn into the elevator. It was not within the jurisdiction of a court of admiralty. If however the jurisdiction of the District Court is to be supported on the ground of diverse citizenship which appears in the pleadings (U. S. ex rel. Pressprich & Son Co. v. James W. Elwell & Co., 250 F. 939 [C. C. A. 2]), the case fails on the merits. Just how grain is to be transshipped without the use of an elevator the libellants do not suggest. Apparently each transshipping vessel was to be brought alongside and filled out of the two original ones. Nobody could seriously have expected any such thing in modern times and in a port where there was a government elevator. The libellants consented to ordinary methods, and there was no conversion. Cushing v. Breed, 14 Allen (Mass.) 376, 92 Am. Dec. 777; Arthur v. Chicago, etc., Ry. Co., 61 Iowa, 648, 17 N. W. 24. It is suggested that their wheat was mixed in one bin with other grades, but the proof is to the contrary, or at least is too equivocal to sustain an issue on which they have the burden. Apparently the wheat was not mixed at all, but put into empty bins; if not, at least the libellants have not proved the mixing.25
Decree reversed; cause remanded to be reheard upon the issue above mentioned.
Supreme Court of Colorado, En Banc.
 George Alan Holley & Associates, Scott D. Albertson, Golden, for petitioner.8
Weltzer & Worstell, Louis A. Weltzer, Denver, for respondent.9
Plaintiff-respondent, Walker Adjustment Bureau (Walker), brought suit in Colorado against defendant-petitioner, Wood Bros. Homes, Inc. (Wood), to recover on a contract between Walker's assignor, Fred Gagnon, and Wood. The trial court granted Wood's motion for summary judgment, ruling that under Colorado choice of law rules New Mexico law applied, and barred the action. In Walker Adjustment Bureau v. Wood Bros. Homes, Inc., 41 Colo.App. 26, 582 P.2d 1059 (1978) the court of appeals reversed the trial court's judgment, holding that under the traditional conflict of law rules or the Restatement (Second) of Conflict of Laws (Restatement (Second)) the law of Colorado applied and the contract was enforceable. We granted certiorari and now reverse the judgment of the court of appeals.11
Fred Gagnon, a resident of California, contracted with Wood, a Delaware corporation having its principal place of business in Colorado, to perform rough carpentry work on a Wood's apartment complex in Albuquerque, New Mexico. Contract negotiations took place in California, Colorado, and New Mexico. Gagnon commenced work on the project before August 22, 1972, the date the contract was signed in Colorado.12
Shortly after Gagnon commenced work, New Mexico officials ordered construction halted because he had not obtained a New Mexico contractor's license. The New Mexico Construction Industries Licensing Act prohibits any person from engaging in the business of a contractor without first obtaining a license from the appropriate state commission. N.M.Stat.Ann. sections 67-35-1 et seq. (now section 60-13-1 et seq.). Wood promptly cancelled Gagnon's contract and refused to pay him, although Wood did pay approximately $27,000 to employees of Gagnon for the work they had completed. Walker, as Gagnon's assignee, then brought suit in Colorado seeking recovery against Wood on either a contract or quantum meruit theory.13
The first issue is whether an unlicensed New Mexico contractor can recover either damages for breach of a construction contract to be performed in New Mexico or in quantum meruit for the value of services performed. Application of Colorado law would result in Wood being liable as there is no impediment to enforceability of the contract. Applying New Mexico law, however, the converse is true. N.M.Stat.Ann. section 67-35-33 (now section 60-13-30) provides:15
"No contractor shall act as agent or bring or maintain any action in any court of the state for the collection of compensation for the performance of any act for which a license is required by the Construction Industries Licensing Act without alleging and proving that such contractor was a duly licensed contractor at the time the alleged cause of action arose."16
 It is thus necessary to determine which law applies to resolve this issue.17
Under the traditional conflict of laws rule for contract actions, the law of the place of execution governs questions regarding the formation of the contract, while the law of the place of performance governs issues relating to the performance of the contract. Western Enterprises, Inc. v. Robo, 28 Colo. App. 157, 470 P.2d 931 (1970); Cockburn v. Kinsley, 25 Colo.App. 89, 135 P. 1112 (1913). This rule, however, has frequently proven unduly inflexible, leading to harsh and unjust results. Courts have often been forced to employ a multitude of escape devices to reach an equitable result. Therefore the traditional choice of law rules no longer provide the predictability and uniformity which were considered their primary virtues. See First National Bank v. Rostek, 182 Colo. 437, 514 P.2d 314 (1973).18
In adopting the Restatement (Second) approach for tort actions, this court recognized the shortcomings of the traditional conflict of laws rule and the benefits of the most significant relationship approach of the Restatement (Second). Dworak v. Olson Construction Co., 191 Colo. 161, 551 P.2d 198 (1976); First National Bank v. Rostek, supra. For the same reasons enunciated in Rostek we now adopt the Restatement (Second) approach for contract actions.19
Where a conflict of laws question is raised, the objective of the Restatement (Second) is to locate the state having the "most significant relationship" to the particular issue. In analyzing which state has the most significant relationship, the principles set forth in Restatement (Second) sections 6 and 188 are to be taken into account. Once the state having the most significant relationship is identified, the law of that state is then applied to resolve the particular issue.20
 In addition to the general principles set forth in sections 6 and 188, several sections of Chapter 8 (Contracts) of the Restatement (Second) apply to specific types of contracts. Section 196 applies to contracts for the rendition of services. It provides:21
"The validity of a contract for the rendition of services and the rights created thereby are determined, in the absence of an effective choice of law by the parties, by the local law of the state where the contract requires that the services, or a major portion of the services, be rendered, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied."22
The effect of section 196 is to create a presumption that the state where services are to be performed is the state having the most significant relationship to the issue of the validity of the contract. The presumption is not conclusive. If another state has a more significant relationship, then the law of that state will be applied.23
The court of appeals held that under the Restatement (Second) Colorado would be the state having the most significant relationship because of the "rule of validation." We disagree.24
Colorado's interest in the validation of agreements and protection of the parties' expectations is a central policy underlying the law of contracts. See Restatement (Second) section 6, comment (2)(h) (1971). While this interest is strong, it does not necessarily supersede all others.25
The New Mexico Construction Industries Licensing Act provides a comprehensive and mandatory system of licensing for persons engaged in construction work in New Mexico. The act is designed to protect New Mexico citizens against "substandard or hazardous construction . . . and by providing protection against the fiscal irresponsibility of persons engaged in construction occupations or trades. . . ." N.M. Stat.Ann. section 67-35-4 (now section 60-13-4) Potential contractors must present evidence of financial responsibility, demonstrate a familiarity with building regulations, submit proof of registration with the tax office, pass an examination, and must not have engaged illegally in the contracting business in New Mexico within the past year. Those who build without a license are subject to a criminal sanction and are expressly barred from obtaining judicial enforcement of their contract or from recovery for the value of services performed.26
In this situation the value of protecting the parties' contractual expectations is outweighed by New Mexico's interest in applying its invalidating rule. A fortiori, the presumption of section 196 that New Mexico law applies has not been rebutted. The law of New Mexico applies to resolve this issue, and as discussed above, the action is consequently barred. This conclusion is in accord with Restatement (Second) section 202(2) (1971) which provides: "When performance is illegal in the place of performance, the contract will usually be denied enforcement."27
The second issue before us is whether Wood should be estopped from asserting that Gagnon was an unlicensed contractor in New Mexico. The court of appeals determined that under Colorado law Wood was estopped because it knew Gagnon did not have a New Mexico contractor's license and had indicated to Gagnon that he could work under its general contractor's license.29
Assuming arguendo that Colorado has an interest in the resolution of this issue and that a conflict exists between the results of applying Colorado and New Mexico law, the state having the most significant relationship to resolution of this issue must be located. For the reasons set forth above, New Mexico's interest clearly preponderates, and therefore is the state having the most significant relationship to this issue.30
Since under New Mexico law estoppel cannot be founded on an illegal contract, a defendant cannot be estopped from  asserting a plaintiff's nonconformance with the licensing requirement of the New Mexico Construction Industries Licensing Act. Kaiser v. Thompson, 55 N.M. 270, 232 P.2d 142 (1951). Therefore Wood cannot be estopped from asserting Gagnon's failure to have a New Mexico contractor's license.31
Accordingly, the judgment of the court of appeals is reversed.32
 The courts of New Mexico have consistently interpreted this section to preclude recovery by an unlicensed contractor in both contract and quantum meruit actions. Without an allegation and proof of a contractor's license, New Mexico law treats the complaint as invalid and the court as without jurisdiction to hear the matter. See Campbell v. Smith, 68 N.M. 373, 362 P.2d 523 (1961); Salter v. Kindon Uranium Corp., 67 N.M. 34, 351 P.2d 375 (1960); Kaiser v. Thompson, 55 N.M. 270, 232 P.2d 142 (1951); Fleming v. Phelps-Dodge Corp., 83 N.M. 715, 496 P.2d 1111 (1972).33
 We first note that both Colorado and New Mexico have sufficient contacts with the controversy and the parties that either state's local law can be constitutionally applied in this case. See Clay v. Sun Insurance Office, Ltd., 363 U.S. 207, 80 S.Ct. 1222, 4 L.Ed.2d 1170 (1960); Home Insurance v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926 (1930).34
§ 6 Choice-of-Law Principles35
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.36
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include:37
(a) the needs of the interstate and international systems,38
(b) the relevant policies of the forum,39
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,40
(d) the protection of justified expectations,41
(e) the basic policies underlying the particular field of law,42
(f) certainty, predictability and uniformity of result, and43
(g) ease in the determination and application of the law to be applied.44
§ 188 Law Governing in Absence of Effective Choice by the Parties45
(1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.46
(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:47
(a) the place of contracting,48
(b) the place of negotiation of the contract,49
(c) the place of performance,50
(d) the location of the subject matter of the contract, and51
(e) the domicile, residence, nationality, place of incorporation and place of business of the parties.52
These contracts are to be evaluated according to their relative importance with respect to the particular issue.53
(3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.
United States Court of Appeals, Fifth Circuit.
   Peyton S. Irby, Jr., Watkins, Ludlam & Stennis, Jackson, MS, for appellant.7
John M. Mooney, Jr., Jackson, MS, for Gann.8
Steven H. Begley, Walter D. Willson, Wells, Wells, Marble & Hurst, Jackson, MS, for Conn. Gen., et al.9
Before REYNALDO G. GARZA, DeMOSS and BENAVIDES, Circuit Judges.10
The Appellant/Cross-Appellee Fruehauf Corporation ("Fruehauf") appeals a jury verdict finding that Fruehauf wrongfully discharged Appellee/Cross-Appellant Bill Gann ("Gann") in violation of Washington state law and a Rule 11 monetary sanction imposed on its counsel. Gann appeals the district court's entrance of summary judgment in favor of Fruehauf and Cross-Appellees Connecticut General Life Insurance Company ("Connecticut General"), Karen Goralski ("Goralski"), Julie Szemborski ("Szemborski"), Carolyn Robinson ("Robinson"), and Mongoose Administrators, Inc. ("Mongoose") on his claims that they violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, and the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1162. We AFFIRM in part and REVERSE in part.12
Gann became an employee of Fruehauf in 1984 in California. Fruehauf transferred Gann to its state of Washington branch in April 1986. Gann hurt himself at work in January 1988, and filed for worker's compensation benefits in Washington on July 15, 1988. Fruehauf transferred Gann to its Mississippi branch in August 1988, and terminated Gann's employment on November 2, 1988.14
In April 1989, Gann filed this action in a federal court in Mississippi. The defendants included Fruehauf (which maintained an employee benefit plan in which Gann participated), Connecticut General (which provided long-term group disability insurance to Fruehauf in support of the employee benefit plan), Goralski (the administrator of certain employee benefit plans for Fruehauf), Szemborski  (a benefit analyst for Connecticut General), Robinson (a benefit analyst for Connecticut General) and Mongoose (the administrator of Gann's continuation coverage under the employee benefit plan established by Fruehauf).15
In his complaint, Gann asserted that all the defendants improperly denied his claim for disability benefits in violation of ERISA and COBRA. Gann also asserted a claim of wrongful discharge against Fruehauf in violation of a Washington statute, Wash.Rev.Code § 51.48.025(1), claiming that Fruehauf discharged him because he had filed for worker's compensation benefits.16
The district court dismissed Gann's ERISA and COBRA claims on a summary judgment motion by the defendants, but allowed Gann's wrongful discharge claim to go to a jury. The jury rendered a verdict in favor of Gann for $112,500.17
Fruehauf raises several arguments on appeal contending that: (1) the district court erred in applying Washington, instead of Mississippi, law to the wrongful discharge claim; (2) the jury verdict is against the overwhelming weight of the evidence; (3) the damages awarded by the jury are not substantiated by the evidence; (4) a J.N.O.V., New Trial, and/or Remittitur should have been granted; and (5) the district court erred in imposing sanctions on Fruehauf and its counsel.19
Fruehauf argues that the district court erred in applying Washington law to Gann's wrongful discharge claim. In his complaint, Gann argues that Fruehauf wrongfully discharged him because he pursued his rights for worker's compensation. Such motivations behind a discharge are made actionable by a Washington statute. Wash.Rev.Code § 51.48.025(1). Mississippi law, however, does not recognize such a cause of action, as all employment contracts for an indefinite term are terminable at will for any reason. Green v. Amerada-Hess Corp., 612 F.2d 212, 214 (5th Cir.), cert. denied, 449 U.S. 952, 101 S.Ct. 356, 66 L.Ed.2d 216 (1980).21
The conflict of law rules of the state in which the district court is located are to be used in determining the applicable law. Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4, 96 S.Ct. 167, 167-68, 46 L.Ed.2d 3 (1975). A district court's determination of state law is reviewed de novo by an appellate court. Allison v. ITE Imperial Corp., 928 F.2d 137, 139 (5th Cir.1991). Here, the district court is located in Mississippi. Mississippi courts have held that a "center of gravity" or "the most substantial relationship" rule applies. White v. Malone Properties, Inc., 494 So.2d 576, 578 (Miss.1986).22
In interpreting this rule for tort actions, Mississippi courts have applied the criteria of §§ 6 and 145 of the Restatement (Second) of Conflict of Laws. McDaniel v. Ritter, 556 So.2d 303, 310 (Miss.1989). Although  § 145 lists it as the first factor to be considered, the place of injury is not the sole determinative factor. Mitchell v. Craft, 211 So.2d 509, 512-13 (Miss.1968). Further, the criteria are not strict elements that must always be present for a state's law to be applied, nor is the formula to be precisely followed in every instance. "The principles of Sections 6 and 145 of the Restatement (Second) defy mechanical application — they are less `rules of law' than generally-stated guideposts." McDaniel v. Ritter, supra, at 310. A literal interpretation of the two sections, however, would have the courts focus upon the states picked out by the criteria of § 145. Allison v. ITE Imperial Corp., supra, at 141. These states would then be compared using the criteria of § 6. Id.23
Mississippi is the state where the injury (termination) occurred, § 145(2)(a), but we view the conduct causing the injury to have occurred in Washington, § 145(2)(b). Section 145(2)(c), the domicile, residence, place of incorporation, and place of business of the parties, points to Mississippi as Gann's residence at the time of his termination. Fruehauf, on the other hand, conducted business in California, Washington, and Mississippi, and had its principal headquarters in Michigan. Finally, § 145(2)(d), the place where the relationship between the parties is centered, points to Washington. Gann worked for Fruehauf in Washington, his injury occurred in Washington, and the act which he claims prompted his discharge by Fruehauf, the filing for and receiving of worker's compensation benefits, occurred in Washington.24
Although the parties had contacts with other states according to the analysis of § 145, the states with the most interest in this matter, a major component of the § 6 analysis, are Mississippi and Washington. Fruehauf argues that Mississippi has the greater interest, as the place of the injury is Mississippi, and Gann was a resident of Mississippi at the time of the discharge. Further, Fruehauf argues that Mississippi has a compelling interest in the correct application of its employment laws to the employment activities within Mississippi.25
With respect to the facts of this case, we disagree with Fruehauf's assessment. The relationship of the parties centers mostly on Washington. Gann worked for Fruehauf in Washington for approximately two and a half years, and it is in Washington where Gann hurt himself and filed for worker's compensation benefits. Although the termination occurred in Mississippi, the period of time in which Gann resided in Mississippi was only three months. We think it significant that the trial court found that the record supports the finding that the contract of employment was made between Gann and Fruehauf outside of Mississippi and prior to Gann's arrival in Mississippi to perform his duties for Fruehauf. We think that under the unique circumstances of this case Washington's interest in this matter is paramount to that of Mississippi. We note, additionally, that the right given by Washington, to obtain worker's compensation benefits without fearing discharge, would be unnecessarily diluted if workers could be dispatched to other states so that they could be discharged in contravention of the policies of the state of Washington.26
Fruehauf next argues that the jury verdict in favor of Gann on the wrongful discharge cause of action was against the overwhelming weight of the evidence and should be reversed.28
In reviewing jury verdicts, the appellate court must view all of the evidence in favor of the prevailing party. Gibraltar Sav. v. LDBrinkman Corp., 860 F.2d 1275, 1297 (5th Cir.1988), cert. denied, 490 U.S. 1091, 109 S.Ct. 2432, 104 L.Ed.2d 988 (1989). "Weighing the conflicting evidence and the inferences to be drawn from that evidence, and determining the relative credibility of the witnesses, are the province of the jury, and its decision must be accepted if the record contains any competent and substantial evidence tending fairly to support the verdict." Id. "Substantial evidence, while something less than the weight of the evidence, is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if different conclusions also might be supported by the evidence." Id.29
In order to establish a prima facie claim under Washington law for wrongful discharge, Gann must prove (1) that he exercised his right for worker's compensation or told Fruehauf that he was going to exercise his right; (2) that he was discharged; and (3) that there was a causal connection between the exercise of his legal right and the discharge. Wilmot v. Kaiser Aluminum & Chemical Corp., 118 Wash.2d 46, 821 P.2d 18, 28-29 (1991). Once Gann meets this standard, Fruehauf must articulate a legitimate reason for the discharge. Id. 821 P.2d at 29. Gann must then prove either that this legitimate reason was a pretext or that retaliation was a substantial or important factor motivating the discharge. Id. at 31.30
The evidence of an improper motive need not be direct. "Ordinarily the prima facie case must, in the nature of things, be shown by circumstantial evidence, since the employer is not apt to announce retaliation as his motive." Id. at 29. Further, "[p]roximity in time between the claim and the firing is a typical beginning point, coupled with evidence of satisfactory work performance and supervisory evaluations." Id.31
Fruehauf claims that Gann failed to prove a causal connection between his discharge and his filing for worker's compensation benefits. Specifically, Fruehauf claims that Gann has not shown that Fruehauf's stated reason for the discharge (that Gann performed very poorly) was a pretext or that retaliation was a substantial factor motivating the discharge. We disagree.32
The proximity of Gann's pursuing worker's compensation benefits and his discharge (three and a half months) together with evidence that Gann's personnel file contained only positive supervisory evaluations and that he had never received any criticisms from anyone in Fruehauf concerning his work performance support the jury verdict. In addition, there is testimony from Gann that, after he had arrived in Washington, he had complained to his superiors many times about the poor performance of certain individuals, but that nothing had been done. Finally, Gann testified that he was aware of a policy of Fruehauf to discharge employees who had been injured on the job. Our review of the record reveals that the jury could reasonably conclude that Gann's discharge was made in retaliation and not for the reason advanced by Fruehauf.33
Fruehauf next contends that the damages awarded by the jury were not substantiated  by the evidence, and that the trial court erred in failing to grant Fruehauf's motions for J.N.O.V., New Trial, and/or Remittitur. In his instructions to the jury, the trial judge provided that:35
If ... you find by a preponderance of the evidence that Bill J. Gann is entitled to a verdict, in arriving at the amount of the award, you should include the amount of medical leave pay and fringe benefits to which Plaintiff Gann was entitled as a result of his employment with Defendant, Fruehauf Corporation, but for his discharge, and you may consider the following factors, if shown by a preponderance of the evidence, in determining additional damages, if any, to be awarded to the Plaintiff. Past, present and future emotional distress sustained by Plaintiff Gann, if any, as a result of his discharge.36
After rendering a verdict in favor of Gann, the jury awarded Gann $112,500 in damages. Fruehauf argues that the damages awarded were unreasonable and excessive.37
Under the court's instructions, the jury was allowed to award not only medical leave pay and fringe benefits to which Gann was entitled, but could also consider past, present, and future emotional distress sustained by Gann as a result of his discharge. Apart from any leave pay and fringe benefit evidence, there was evidence that Gann suffered emotional distress due to the lost benefits, the termination itself, the losing of his home in Mississippi by foreclosure, and additional emotional distress by having to relocate with his wife and having to be supported by his mother. Accordingly, we reject Fruehauf's arguments that the jury's decision is not supported by the evidence and is unreasonable and excessive. We also reject Fruehauf's argument that he is entitled to a J.N.O.V., New Trial, and/or Remittitur as without merit.38
Fruehauf next argues that the district court erred in imposing a sanction of $2,385.40 upon Fruehauf's counsel for submitting a second Motion for Partial Summary Judgment in violation of Rule 11. The record reveals that the district court had denied Fruehauf's first Motion for Partial Summary Judgment as to the retaliatory discharge claim in 1990. This claim was based solely on Fruehauf's argument that Mississippi law applied and precluded an action for retaliatory discharge based on the Mississippi employment-at-will doctrine. In 1993, Fruehauf filed a second Motion for Partial Summary Judgment seeking a dismissal of the claim on the basis of Washington law, with Gann's poor performance as the legitimate reason for his termination. Such motion was supported by proper affidavit. Nonetheless, the order sanctioning Fruehauf for this second motion provides in pertinent part as follows:40
This same argument was presented to the Court by Fruehauf's earlier Motion for Partial Summary Judgment. The Court denied that Motion by its Order dated March 9, 1990. Fruehauf's present Motion has been filed unnecessarily for the purposes of harassing Plaintiff and needlessly increasing the cost of litigation.41
It is clear that the trial court sanctioned Fruehauf based upon an erroneous conclusion that the argument presented in his latter summary judgment motion was the same as that presented in his first motion for summary judgment with respect to the wrongful termination cause of action. Accordingly, we find that the district court abused its discretion in sanctioning Fruehauf's counsel and thereby set aside its sanction.42
Gann claims that the district court erred in not providing reinstatement or a similar remedy and attorney's fees to Gann after he prevailed in the jury trial. Gann argues that Washington law authorizes the district court to award the prevailing plaintiff "all appropriate relief" including reinstatement  with back pay and attorney's fees. Further, according to Gann, another Washington statute, RCW 49.48.030, provides for attorney's fees in regards to claims for back wages.45
RCW 51.48.025, however, only states that the court has jurisdiction to order such relief, not that it must order such relief. Thus, Gann has not stated a claim here, as he has not indicated how the district court abused its discretion.46
Gann also argues that the district court erred in not sanctioning Fruehauf for filing a counterclaim against Gann for the purposes of harassment in violation of Rule 11. In support of his arguments, Gann points to the fact that Fruehauf dismissed its counterclaim for damages shortly before trial. Gann has failed to show an abuse of discretion in the trial court's failure to impose sanctions.47
On the same day that Gann was terminated, Fruehauf informed him that his coverage under the employee benefit plan sponsored by Fruehauf and administered by Connecticut General would cease on November 30, 1988, and that he would be eligible under COBRA to continue his group medical coverage for up to eighteen months if he paid certain premiums. On January 30, 1989, Gann elected to have such coverage, but on March 20, 1989, Mongoose, the administrator of the continuation coverage, terminated the coverage because of Gann's alleged nonpayment of premiums. Gann had also filed with Fruehauf on November 30, 1988 a claim for certain disability benefits. However, when Gann refused to submit to an independent medical examination, Connecticut General denied the claim.50
In his complaint, Gann brought forth seven causes of action. The district court entered summary judgment against Gann on all his claims. Although Gann asserts that he is appealing the rulings on all his claims, he only presents arguments on his claims that Fruehauf, Connecticut General, Goralski, Szemborski, and Robinson did not pay Gann disability benefits in violation of § 1132(a)(1)(B); and Fruehauf, Goralski, and Mongoose terminated Gann's continuation coverage in violation of COBRA. Because he has not advanced arguments in the body of his brief in support of his appeal of his other claims, Gann has waived or abandoned these claims. Yohey v. Collins, 985 F.2d 222, 224 (5th Cir.1993).51
Appellate courts review summary judgments de novo, applying the same standard as the district court. Bodenheimer v. PPG Industries, Inc., 5 F.3d 955, 956 (5th Cir.1993). Summary judgment shall be rendered if there is no genuine issue of material  fact and if the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In making its determination, the court must draw all justifiable inferences in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986).52
The district court held that one of the reasons why a refusal to pay the benefits was justified was because Gann was not under the care of a licensed physician at the time his claim was pending. The Certificate of Insurance states that "[n]o Monthly Benefits will be paid for a period of Total Disability when you are not under care of a licensed physician." Gann has not responded to this argument in this appeal. Although Gann has been under the care of a chiropractor, chiropractors are not licensed to practice medicine, and do not qualify according to the words of the certificate. We thus affirm the trial court's summary judgment on the disability benefits claim on this basis, and do not need to reach Gann's other arguments with respect to such claim.54
Gann alleged in his complaint that Fruehauf, Goralski, and Mongoose wrongfully terminated his continuation of coverage in violation of COBRA, and appeals the district court's entrance of summary judgment against Gann. The district court entered summary judgment because it found that Gann owed one month's premium for February 1989. We agree.56
The due date for premiums was the first day of each month of coverage. But 29 U.S.C. § 1162(2)(C) provides that a plan cannot require the payment of any premium before forty-five days after the day on which the beneficiary elected to have continuation coverage. Gann elected to have coverage on January 30, 1989. Under § 1162(2)(C), the premiums due February 1 were not required to be paid until March 17. The summary judgment evidence presented on behalf of Fruehauf establishes that the February payment was not made by Gann by March 17. Gann's summary judgment evidence on this point was unable to specifically set out that his February payment was made on or before March 17. Because no material issue of fact was raised by the summary judgment proof, the district court correctly found that Gann was not entitled to his cause of action alleging a wrongful termination of his continuance of coverage.57
Gann argues that the district court erred in not allowing him to supplement the record. After the district court issued its order dismissing Gann's various claims on summary judgment, Gann moved to supplement the record. Gann argues that the submitted evidence would have raised genuine issues of material fact. The lower court, however, disagreed and denied the motion.59
Gann argues that the evidence that he wishes to add as supplements is not new, but rather corroborates his arguments that summary judgment is inappropriate. But Gann does not specify or describe the evidence or how the district court abused its discretion. Under such circumstances, no abuse of discretion is shown. Moreover, as Gann describes the evidence as not new evidence, but corroborative of his arguments, no harm is shown.60
For the foregoing reasons, the judgment of the trial court is AFFIRMED, except as to the award of sanctions against Fruehauf's counsel, which is REVERSED.62
 Fruehauf cites French v. Beatrice Foods Co., 854 F.2d 964 (7th Cir.1988), as authority in support of his arguments. However, French concerns the application of Illinois conflict of law rules, and Fruehauf does not demonstrate the connection between the doctrines of Illinois and Mississippi.63
Section 6 provides:64
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) case in the determination and application of the law to be applied.
Section 145 provides:66
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicile, residence, nationality, place of incorporation and place of business of the parties,
(d) the place where the relationship, if any, between the parties is centered.
 Gann contends that it was his action in pursuing worker's compensation benefits in Washington, while Fruehauf contends that Gann's termination was the result of Gann's work performance in Washington revealed by an internal audit.68
 In finding the law of Washington to apply to this case, we reject Fruehauf's reliance on McDaniel v. Ritter, supra, for the proposition that the application of Washington law in this case would be offensive to the public policy of Mississippi. Mississippi courts have held that the laws of other states would not be applied if the laws are antagonistic to the interests and policies of Mississippi. In McDaniel, it was held that a foreign contributory negligence regime would be offensive to the comparative negligence regime of Mississippi because enforcement of the foreign state law "would be offensive to the deeply ingrained or strongly felt public policy of" Mississippi. McDaniel v. Ritter, supra,at 316-17. However, the issue in this case is whether a regime that recognizes a wrongful discharge cause of action "would be offensive to the deeply ingrained or strongly felt public policy of" Mississippi.69
Where the specific public policy issue involves a non-resident or a contract made outside of Mississippi, Mississippi courts have held that its public policy concerns are not implicated. Boardman v. United Services Auto. Assn., 470 So.2d 1024, 1039 (Miss.), cert. denied, 474 U.S. 980, 106 S.Ct. 384, 88 L.Ed.2d 337 (1985). Here, the district court found that the contract was made outside of Mississippi. The record supports such finding. Accordingly, McDaniel does not preclude the application of Washington law in Mississippi, and because Washington has the greater interest, we hold that the trial court correctly applied the law of the state of Washington.70
 The district court's order of sanction also contained an argument that was contained in Fruehauf's answer, but which was not discussed in the motion for summary judgment for which Fruehauf's counsel was sanctioned.71
The claims brought forth by Gann are as follows:72
(1) Goralski did not supply Gann with a requested copy of an insurance policy in violation of 29 U.S.C. §§ 1132(a)(1)(A) and 1132(c).
(2) Fruehauf, Connecticut General, Goralski, Szemborski, and Robinson did not pay Gann disability benefits in violation of § 1132(a)(1)(B).
(3) Fruehauf, Connecticut General, Goralski, Szemborski, and Robinson breached their duties as fiduciaries under the employee benefit plan.
(4) Fruehauf, Connecticut General, Goralski, Szemborski, and Robinson failed to provide Gann an individual statement setting forth the information to be contained in a registration statement required by 26 U.S.C. § 6057(a)(2) and 29 U.S.C. § 1132(a)(4).
(5) Fruehauf, Goralski, and Mongoose terminated Gann's continuation coverage in violation of COBRA.
(6) Connecticut General engaged in unfair and deceptive trade practices in the business of insurance in violation of Miss.Code Ann. § 83-5-29.
(7) Fruehauf willfully, intentionally, and in bad faith tortiously interfered with the contractual rights of Gann.
§ 1132(a)(1)(B) provides: "A civil action may be brought by a participant or beneficiary to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan...."74
"A denial of ERISA benefits by a plan administrator challenged under § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), is reviewed by the courts under a de novo standard unless the plan gives the administrator `discretionary authority to determine eligibility for benefits or to construe the terms of the plan.'" Duhon v. Texaco, Inc., 15 F.3d 1302, 1305 (5th Cir.1994).75
Gann also argues that a grace period in his continuation coverage provided that a period of thirty-one days will be granted as a grace period for the payment of premiums after the initial premium. The grace period provision states:76
GRACE PERIOD. If, before a Premium Due Date, the Policyholder has not given written notice to the Insurance Company that the policy is to be cancelled, a Grace Period of 31 days will be granted for the payment of each premium after the initial premium. The policy will stay in effect during that time.
Thus, according to Gann, because March 17 was the due date for the February premium, which was not the initial premium, the grace period extends the deadline thirty-one days past March 17.78
We disagree. The statutory extension to March 17 is an extension for the payment of the premiums and not an extension of the due date of the premiums, which remains the first day of each month. Thus, the grace period of the coverage operates thirty-one days from the due date, the first day of each month.
Supreme Court of Oregon.
 Cleveland C. Cory, Portland, argued the cause for appellant. With him on the briefs was George H. Fraser, Portland.10
Louis Schnitzer, Portland, argued the cause and filed a brief for respondent.11
Before ROSSMAN, Presiding Justice, and PERRY, SLOAN, O'CONNELL, GOODWIN, DENECKE and LUSK, Justices.12
This is an action to collect two promissory notes. The defense is that the defendant maker has previously  been declared a spendthrift by an Oregon court and placed under a guardianship and that the guardian has declared the obligations void. The plaintiff's counter is that the notes were executed and delivered in California, that the law of California does not recognize the disability of a spendthrift, and that the Oregon court is bound to apply the law of the place of the making of the contract. The trial court rejected plaintiff's argument and held for the defendant.15
This same defendant spendthrift was the prevailing party in our recent decision in Olshen v. Kaufman, 235 Or 423, 385 P2d 161 (1963). In that case the spendthrift and the plaintiff, an Oregon resident, had gone into a joint venture to purchase binoculars for resale. For this purpose plaintiff had advanced moneys to the spendthrift. The spendthrift had repaid plaintiff by his personal check for the amount advanced and for plaintiff's share of the profits of such venture. The check had not been paid because the spendthrift had had insufficient funds in his account. The action was for the unpaid balance of the check.16
The evidence in that case showed that the plaintiff had been unaware that Kaufman was under a spendthrift guardianship. The guardian testified that he knew Kaufman was engaging in some business and had bank accounts and that he had admonished him to cease these practices; but he could not control the spendthrift.17
The statute applicable in that case and in this one is ORS 126.335:18
"After the appointment of a guardian for the spendthrift, all contracts, except for necessaries, and all gifts, sales and transfers of real or personal estate made by such spendthrift thereafter  and before the termination of the guardianship are voidable." (Repealed 1961, ch 344, § 109, now ORS 126.280)19
We held in that case that the voiding of the contract by the guardian precluded recovery by the plaintiff and that the spendthrift and the guardian were not estopped to deny the validity of plaintiff's claim. Plaintiff does not seek to overturn the principle of that decision but contends it has no application because the law of California governs, and under California law the plaintiff's claim is valid.20
The facts here are identical to those in Olshen v. Kaufman, supra, except for the California locale for portions of the transaction. The notes were for the repayment of advances to finance another joint venture to sell binoculars. The plaintiff was unaware that defendant had been declared a spendthrift and placed under guardianship. The guardian, upon demand for payment by the plaintiff, declared the notes void. The issue is solely one involving the principles of conflict of laws.21
We could quickly dispose of some of the conflict problems involved by applying principles previously stated some years ago by this court and other courts and writers. We are restrained from following this easy course for two reasons: First, "Contracts is by common consent the most complex and also the most confused part of Conflict of Laws." Restatement (Second), Conflict of Laws, Tentative Draft No. 6, p 1. "Conflict of laws was in a far more unexplored state than it is now when Professor Beale began work on the original Restatement of the nineteen-twenties." Reese, Contracts and the Restatement of Conflict of Laws, Second, 9 Int & Comp L Q 531, 532 (1960).  Second, the field of conflict of laws is today filled with judicial and pedagogical groping; the blazes of the future trail still remain faint and far apart. "In certain fields, as currently in Conflict of Laws, the wilderness grows wilder, faster than the axes of discriminating men can keep it under control." Traynor, Law and Social Change in a Democratic Society, 1956 Ill L For 230, 234.22
Under these circumstances our duty is threefold, — to decide this case correctly, to indicate generally our views on the course to be taken in this particular part of the conflict of laws, but at the same time to refrain from making any pronouncements which might in the future restrain this court from taking a course which by that time has proved to be the most desirable.23
Before entering the choice-of-law area of the general field of conflict of laws, we must determine whether the laws of the states having a connection with the controversy are in conflict. Defendant did not expressly concede that under the law of California the defendant's obligation would be enforceable, but his counsel did state that if this proceeding were in the courts of California, the plaintiff probably would recover. We agree.24
1, 2. At common law a spendthrift was not considered incapable of contracting. Taylor v. Koenigstein, 128 Neb 809, 260 NW 544, 546 (1935). Incapacity of a spendthrift to contract is a disability created by the legislature. California has no such legislation. In addition, the Civil Code of California provides that all persons are capable of contracting except minors, persons judicially determined to be of unsound mind, and persons deprived of civil rights. § 1556. Furthermore, § 1913 of the California Code of Civil Procedure  provides: "* * * that the authority of a guardian * * * does not extend beyond the jurisdiction of the Government under which he was invested with his authority."25
3, 4. Defendant contends that the law of California should not be applied in this case by the Oregon court because the invalidity of the contract is a matter of remedy, rather than one of substance. Matters of remedy, procedure, are governed by the law of the forum. What is a matter of substance and what is a matter of procedure are sometimes difficult questions to decide. Stumberg states the distinction as follows: "* * * procedural rules should be classified as those which concern methods of presenting to a court the operative facts upon which legal relations depend; substantive rules, those which concern the legal effect of those facts after they have been established." Stumberg, Principles of Conflict of Laws (3d ed), 133. Based upon this conventional statement of the distinction, it is obvious that we are not concerned with a procedural issue, but with a matter of substantive law.26
Plaintiff contends that the substantive issue of whether or not an obligation is valid and binding is governed by the law of the place of making, California. This court has repeatedly stated that the law of the place of contract "must govern as to the validity, interpretation, and construction of the contract." Jamieson v. Potts, 55 Or 292, 300, 105 P 93, 25 LRA (NS) 24 (1910). Restatement 408, Conflict of Laws, § 332, so announced and specifically stated that "capacity to make the contract" was to be determined by the law of the place of contract.27
This principle, that lex loci contractus must govern, however, has been under heavy attack for years.  For example, see Lorenzen, Validity and Effects of Contracts in the Conflict of Laws, 30 Yale L J 565, 655 (1921), 31 Yale L J 53 (1921). The strongest criticism has been that the place of making frequently is completely fortuitous and that on occasion the state of making has no interest in the parties to the contract or in the performance of the contract. Stumberg, supra, at 231. The principle is undermined when it is observed that in many of the decisions, the state of the place of making had other associations with the contract, e.g., it was also the place of performance and the domicile of one of the parties. In our decisions stating this principle, the state whose law was applied had connections with the contract in addition to being the place of making. Jamieson v. Potts, supra (55 Or 292); McGirl v. Brewer, 132 Or 422, 443, 280 P 508, 285 P 208 (1930). As a result of this long and powerful assault, the principle is no longer a cornerstone of the law of conflicts. Tentative Draft No. 6, p 3, Restatement (Second), Conflict of Laws, comments on the new contracts chapter: "First, it no longer says dogmatically that the validity of a contract is governed by the law of the place of contracting."28
There is no need to decide that our previous statements that the law of the place of contract governs were in error. Our purpose is to state that this portion of our decision is not founded upon that principle because of our doubt that it is correct if the only connection of the state whose law would govern is that it was the place of making.29
In this case California had more connection with the transaction than being merely the place where the contract was executed. The defendant went to San Francisco to ask the plaintiff, a California resident,  for money for the defendant's venture. The money was loaned to defendant in San Francisco, and by the terms of the note, it was to be repaid to plaintiff in San Francisco.30
On these facts, apart from lex loci contractus, other accepted principles of conflict of laws lead to the conclusion that the law of California should be applied. Sterrett v. Stoddard Lbr. Co., 150 Or 491, 504, 46 P2d 1023 (1935), rests, at least in part, on the proposition that the validity of a note is determined by the law of the place of payment. Tentative Draft No. 6, p 30, Restatement (Second), Conflict of Laws, § 332b(a) states: "if the place of contracting and the place of performance are in the same state, the local law of this state determines the validity of the contract, * * *." Judge Goodrich in Frankel v. Johns-Manville Corporation, 257 F2d 508, 511 (3d Cir 1958), stated: "This throws both making and performance into the same state. And under those circumstances the conflict of laws rule in Pennsylvania is that the law of making-performance controls." The place of payment, unlike the place of making, is usually not determined fortuitously. The place is usually selected by the payee and the payee normally selects his place of business or the location of his bank. The parties at the time of contract normally do not have in mind the problem of what law should govern. If they did, it is our belief that the payee would intend the law of the place of payment to be governing.31
There is another conflict principle calling for the application of California law. Stumberg terms it the application of the law which upholds the contract. Stumberg, supra, at 237. Ehrenzweig calls it the "Rule of Validation." Ehrenzweig, Conflict of Laws, 353  (1962). Mr. Justice Harlan, speaking for the majority in Kossick v. United Fruit Co., 365 US 731, 741, 81 S Ct 886, 6 L ed2d 56 (1961), stated such a rule and cited Ehrenzweig. Accord, Leflar, The Validity of Contracts and the Conflict of Laws, 2 Ark L Bull 3 (1930). The "rule" is that, if the contract is valid under the law of any jurisdiction having significant connection with the contract, i.e., place of making, place of performance, etc., the law of that jurisdiction validating the contract will be applied. This would also agree with the intention of the parties, if they had had any intentions in this regard. They must have intended their agreement to be valid.32
Stumberg, supra, at 237, observes that this principle has been most frequently applied in cases in which the claim of invalidity has been based upon the contention that the contract is usurious. The same principle, however, has been applied to other types of cases. The "rule of validation" is appealing because it is founded upon the same reasoning that is followed in other aspects of the law of contracts. This court and all other courts reiterate that contracts are "sacred and shall be enforced by the courts of justice unless some other over-powering rule of public policy intervenes which renders such agreement illegal or unenforceable. * * * Without such a rule the commerce of the world would soon lapse into a chaotic state." Bliss v. Southern Pacific Co., 212 Or 634, 646, 321 P2d 324 (1958). This court has repeatedly stated that a contract is presumed valid. Edwards Farms v. Smith Canning Co., 197 Or 57, 62, 251 P2d 133 (1952). We also consistently hold: "It is our duty to construe the writing, if possible, so that it has meaning and validity." Champion v. Hammer, 178 Or 595, 601, 169 P2d 119 (1946). In the general law of contracts  we constantly strive to hold the contract valid and enforceable. The "rule of validation" has the same purpose in conflict of laws.33
Thus far all signs have pointed to applying the law of California and holding the contract enforceable. There is, however, an obstacle to cross before this end can be logically reached. In Olshen v. Kaufman, supra, we decided that the law of Oregon, at least as applied to persons domiciled in Oregon contracting in Oregon for performance in Oregon, is that spendthrifts' contracts are voidable. Are the choice-of-law principles of conflict of laws so superior that they overcome this principle of Oregon law?34
5. To answer this question we must determine, upon some basis, whether the interests of Oregon are so basic and important that we should not apply California law despite its several intimate connections with the transaction. The traditional method used by this court and most others is framed in the terminology of "public policy." The court decides whether or not the public policy of the forum is so strong that the law of the forum must prevail although another jurisdiction, with different laws, has more and closer contacts with the transaction. Included in "public policy" we must consider the economic and social interests of Oregon. When these factors are included in a consideration of whether the law of the forum should be applied this traditional approach is very similar to that advocated by many legal scholars. This latter theory is "that choice-of-law rules should rationally advance the policies or interests of the several states (or of the nations in the world community)." Hill, Governmental Interest and the Conflict of Laws — A Reply to Professor Currie, 27 Chi L Rev 463, 474 (1960); Currie, Selected Essays on the Conflict of  Laws, 64-72 (1963), reprint from 58 Col L Rev 964 (1958).35
6. The traditional test this court and many others have used in determining whether the public policy of the forum prevents the application of otherwise applicable conflict of laws principles is stated in the oft-quoted opinion of Mr. Justice Cardozo in Loucks v. Standard Oil Co. of N.Y., 224 NY 99, 120 NE 198 (1918). Foreign law will not be applied if it "* * * would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal." Quoted in Schultz v. First Nat. Bk. of Portland, 220 Or 350, 360, 348 P2d 22, 81 ALR2d 1121 (1960). In the latter case we held the law of Oregon — that contracts to adopt were invalid — was not so fundamental to our jurisprudence that we could not apply the Nebraska law — that such contracts were valid when made and to be performed in Nebraska. In that case the plaintiff, whose domicile is not stated, was claiming to be the heir, by reason of the Nebraska contract to adopt, of an Oregon decedent.36
In McGirl v. Brewer, supra (132 Or 422), Oregonians purchased Montana land, delivering a promissory note secured by a purchase money mortgage. The note was executed, delivered, and payable in Montana. The purchaser defaulted and the mortgage was foreclosed in Montana. The foreclosure sale yielded less than the amount owing on the note and mortgage. The action in Oregon was on the note for the unpaid balance, i.e., for the deficiency. An Oregon statute prohibits a deficiency judgment in a foreclosure of a purchase money mortgage; a Montana statute permits such a deficiency judgment. The court pointed out that the Oregon statute was adopted to prevent a  repetition of the plight in which debtors found themselves in the panic of 1897. Nevertheless, this court found that the Montana statute is not a law "which offends by shocking moral standards, or is injurious or pernicious to the public welfare," applied the law of Montana, and permitted the action for the deficiency. (132 Or at 447)37
In Bowles v. Barde Steel Co., 177 Or 421, 433-437, 164 P2d 692 (1945), 162 ALR 328. Mr. Justice BRAND reviewed the subject and some of the leading cases and concluded: "The cases cited above do not involve penalties but they do manifest an evolution toward wider recognition by one state of the rights created by the statutes of another state."38
How "deep rooted [the] tradition of the common weal," particularly regarding spendthrifts, is illustrated by our decisions on foreign marriages. This court has decided that Oregon's policy voiding spendthrifts' contracts is not so strong as to void an Oregon spendthrift's marriage contract made in Washington. Sturgis v. Sturgis, 51 Or 10, 93 P 696, 131 AS 724, 15 LRA (NS) 1034 (1908), was a suit for divorce and alimony. Defendant had been declared a spendthrift by an Oregon court. The guardian refused to consent to the spendthrift's marriage. The spendthrift got married in Washington. The marriage was held valid. Although the case involved a spendthrift's contract and, therefore, is persuasive in this case, it should not be considered determinative since marriage contracts are unique and the law applicable to marriage contracts does not necessarily apply to other types of contracts.39
 On the other hand, we have held a foreign marriage, made before the expiration of six months from the rendition of an Oregon divorce decree, is absolutely void in the courts of Oregon. McLennan v. McLennan, 31 Or 480, 50 P 802, 38 LRA 863 (1897). Our statute provided then, and provides now, that a divorced person is incapable of contracting marriage until six months from the expiration of the Oregon decree. ORS 107.110. McLennan v. McLennan, supra, did not use the reasoning that Oregon's public policy against too-early remarriage was so basic that a Washington marriage in violation thereof would not be recognized. However, in In re Estate of Ott, 193 Or 262, 269, 238 P2d 269 (1951), affirming McLennan v. McLennan, we did use the public policy rationale.40
The only decision on this issue involving spendthrifts and economic contracts is Gates v. Bingham, 49 Conn 275 (1881). The defendant was adjudged a spendthrift in Connecticut. He moved to Massachusetts and there incurred a debt which was a valid debt in Massachusetts. An action was brought on the debt in Connecticut, and the defense of being a spendthrift was made. The defendant contended it was against the public policy of Connecticut to permit contracts with spendthrifts to be enforced. The court in its decision did not discuss this contention; it held that a contract valid where made is equally valid in Connecticut. Although the debt was for a necessity, rent, the court did not rest its decision on that fact.41
The difficulty in deciding what is the fundamental law forming a cornerstone of the forum's jurisprudence and what is not such fundamental law, thus allowing it to give way to foreign law, is caused by the lack of any even remotely objective standards. Former limitations on the capacity of married women to contract  illustrate the difficulty. Milliken v. Pratt, 125 Mass 374, 28 AR 241 (1878), is used in many case books as an example. There, the Massachusetts court held that the Massachusetts law that a Massachusetts married woman was incapable of contracting as a surety was not such a cornerstone of Massachusetts jurisprudence and economy that Maine law to the contrary could not be applicable. However, in Union Trust Co. v. Grosman, 245 US 412, 38 S Ct 147, 62 L ed 368 (1918), Mr. Justice Holmes, writing for the court, held that a similar Texas limitation on a Texas married woman was such an integral part of Texas policy that the Illinois law to the contrary would not be enforced in a Texas court.42
However, as previously stated, if we include in our search for the public policy of the forum a consideration of the various interests that the forum has in this litigation, we are guided by more definite criteria. In addition to the interests of the forum, we should consider the interests of the other jurisdictions which have some connection with the transaction.43
Some of the interests of Oregon in this litigation are set forth in Olshen v. Kaufman, supra. The spendthrift's family which is to be protected by the establishment of the guardianship is presumably an Oregon family. The public authority which may be charged with the expense of supporting the spendthrift or his family, if he is permitted to go unrestrained upon his wasteful way, will probably be an Oregon public authority. These, obviously, are interests of some substance.44
Oregon has other interests and policies regarding this matter which were not necessary to discuss in Olshen. As previously stated, Oregon, as well as all other states, has a strong policy favoring the validity  and enforceability of contracts. This policy applies whether the contract is made and to be performed in Oregon or elsewhere.45
The defendant's conduct, — borrowing money with the belief that the repayment of such loan could be avoided — is a species of fraud. Oregon and all other states have a strong policy of protecting innocent persons from fraud. "The law * * * is intended as a protection to even the foolishly credulous, as against the machinations of the designedly wicked." Johnson v. Cofer, 204 Or 142, 150, 281 P2d 981 (1955).46
It is in Oregon's commercial interest to encourage citizens of other states to conduct business with Oregonians. If Oregonians acquire a reputation for not honoring their agreements, commercial intercourse with Oregonians will be discouraged. If there are Oregon laws, somewhat unique to Oregon, which permit an Oregonian to escape his otherwise binding obligations, persons may well avoid commercial dealings with Oregonians.47
7. The substance of these commercial considerations, however, is deflated by the recollection that the Oregon Legislature has determined, despite the weight of these considerations, that a spendthrift's contracts are voidable.48
California's most direct interest in this transaction is having its citizen creditor paid. As previously noted, California's policy is that any creditor, in California or otherwise, should be paid even though the debtor is a spendthrift. California probably has another, although more intangible, interest involved. It is presumably to every state's benefit to have the reputation of being a jurisdiction in which contracts can be made and performance be promised with the certain knowledge that such contracts will be enforced.  Both of these interests, particularly the former, are also of substance.49
We have, then, two jurisdictions, each with several close connections with the transaction, and each with a substantial interest, which will be served or thwarted, depending upon which law is applied. The interests of neither jurisdiction are clearly more important than those of the other. We are of the opinion that in such a case the public policy of Oregon should prevail and the law of Oregon should be applied; we should apply that choice-of-law rule which will "advance the policies or interests of" Oregon. Hill, supra, 27 Chi L Rev at 474.50
Courts are instruments of state policy. The Oregon Legislature has adopted a policy to avoid possible hardship to an Oregon family of a spendthrift and to avoid possible expenditure of Oregon public funds which might occur if the spendthrift is required to pay his obligations. In litigation Oregon courts are the appropriate instrument to enforce this policy. The mechanical application of choice-of-law rules would be the only apparent reason for an Oregon court advancing the interests of California over the equally valid interests of Oregon. The present principles of conflict of laws are not favorable to such mechanical application.51
We hold that the spendthrift law of Oregon is applicable and the plaintiff cannot recover.52
In my dissent in Olshen v. Kaufman, 235 Or 423, 385 P2d 161 (1963) I expressed the view that ORS 126.335 should be construed to permit a creditor to  recover from a spendthrift under the circumstances of that case. A majority of the court felt otherwise.55
Although I disagree with the rationale in that case, I must now accept it to the extent that it is applicable. I believe that it is applicable in the case before us and that its application forces us to choose the law of Oregon in preference to the law of California.56
In the Olshen case we had to choose between two competing policies; on one hand the policy of protecting the interest of persons dealing with spendthrifts which, broadly, may be described as the interest in the security of transactions, and on the other hand the policy of protecting the interests of the spendthrift, his family and the county. It was decided that the Oregon Legislature adopted the latter policy in preference to the former.57
The case at bar involves the same choice even though the contract was made in California and it was to be performed there. The fact that California was the setting for the making and performance of the contract is of no significance except that it requires us to consider California's interest in protecting its own citizens. That interest is an interest in the security of commercial transactions and was before this court in the Olshen case. To distinguish the Olshen case it would be necessary to assume that although the legislature intended to protect the interest of the spendthrift, his family and the county when local creditors were harmed, the same protection was not intended where the transaction adversely affected foreign creditors. I see no basis for making that assumption. There is no reason to believe that our legislature intended to protect California creditors to a greater extent than our own.58
I am unable to agree with the conclusion of the majority.60
"Public policy" as a basis for decision has an overtone of predestination which sometimes tends to limit analysis. See Paulsen and Sovern, "Public Policy" in the Conflict of Laws, 56 Colum L Rev 969, 988 (1956). In a situation in which the law of the forum differs from the law of the jurisdiction having the majority of contacts with the transaction, the invocation of "public policy" may also produce a result that is contrary to generally accepted principles. 56 Colum L Rev at 988.61
In Loucks v. Standard Oil Co., 224 NY 99, 120 NE 198 (1918), Mr. Justice Cardozo discussed the situation in which an action's contacts with the forum state are so important that foreign law should not be applied. He pointed out that foreign law would not be applied if it "would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal." 224 NY at 111, 120 NE at 202.62
In the instant case, the majority finds in effect that to apply the law of California would be to violate some deep-rooted tradition of our common weal. On the facts of this case, I believe the mere assertion of such a proposition suffices to refute it.63
As a general rule the power conferred by a statute providing for the guardianship of a spendthrift's property is an extraordinary one, and should be exercised with great caution. See Guardianship of Reed, 173 Wis 628, 182 NW 329, 17 ALR 1063 (1921). I am aware of no compelling public reason for saving spendthrifts from the result of their folly at the expense of innocent merchants.64
 The case of Gates v. Bingham, 49 Conn 275 (1881), involved a spendthrift statute. The defendant had been declared a spendthrift in Connecticut, and a conservator had been appointed. The defendant moved to Massachusetts and failed to pay the rent for his house in Massachusetts. The plaintiff knew that the defendant was under a conservatorship in Connecticut. The defendant returned to Connecticut and continued to live in that state until the time of the action. The plaintiff brought the action in Connecticut. The court found that while the defendant was residing in Massachusetts he was sui juris, and "if incapable of managing his own affairs the only mode of securing a legal supervision for him was by proceeding under the laws of that state in the same manner as in the case of any other of its inhabitants * * *." 49 Conn at 278. The court also stated:65
"* * * The disability under which one is placed, with regard to his power to make contracts, by having a conservator appointed over him, is created wholly by statute, and can have no operation where the statute does not operate. It is a well settled principle that no statute can operate beyond the territorial limits of the state in which it was enacted * * *." 49 Conn at 278.66
Because the facts in the Bingham case are so different from the facts in the instant case, I allude to the Bingham case only to illustrate one way in which a court has refrained from giving a spendthrift statute extraterritorial effect.67
The majority opinion acknowledges that at common law a spendthrift was not considered incapable of contracting. The majority also points out that "[t]his court has decided that Oregon's policy voiding spendthrifts' contracts is not so strong as to void an Oregon  spendthrift's marriage contract made in Washington." These two statements suggest that the protection of Oregon spendthrifts is not "some deep-rooted tradition of the common weal." Furthermore, in the instant case, no "fundamental principle of justice" or "prevalent conception of good morals" would be violated if the law of California were applied.68
The plaintiff was a merchant in California who was approached in the ordinary course of business by a seemingly competent person and asked to enter into a business arrangement. The notes were executed, delivered, and made payable in California. If the parties gave any thought to law at all, which is unlikely, they would have assumed that California law would apply to their business. Consequently, if California law were to be applied, it would neither surprise the parties nor shock the conscience of the court. It would hardly violate any "fundamental principle of justice" or "prevalent conception of good morals."69
Because the majority opinion has presented a thorough outline of the different choice-of-law doctrines applicable to contract cases, I shall discuss only those doctrines that I think should be determinative in the instant case.70
In Principles of Conflict of Laws (3d ed, 1963), Prof. George Wilfred Stumberg argues that the law which upholds the contract should determine the outcome of a choice-of-law problem in a contract case. He states:71
"* * * It would seem to be more desirable to uphold the contract if it satisfies the law of any place with which it has a substantial connection, unless performance at the place of performance is prohibited * * *." Stumberg, supra at 238.72
 While discussing the principle of the law that upholds the contract, Stumberg points out that whatever theory of choice of laws is adopted, there is a danger that "public policy" may be argued against the foreign law. Stumberg states his view of the "public policy" argument in the following words:73
"* * * Policy as a ground for refusal of relief, it is believed, should be confined within narrow limits. As between the states, it should seldom, if at all, apply * * *." Stumberg, supra at 239, footnote 59.74
For the contrary view, see Currie and Schreter, Unconstitutional Discrimination in the Conflict of Laws: Privileges and Immunities, 69 Yale L J 1323 (1960).75
In Contracts in the Conflict of Laws, Part One: Validity, 59 Colum L Rev 973 (1959), Professor Albert A. Ehrenzweig also favors the rule that would uphold the contract, and points out:76
"* * * To be sure, courts have since been forced, while seeking common sense solutions, to pay lip service to the rigid formulas of official doctrine * * *, but they have in effect continued to apply the lex validitatis, namely that law among the `proper' laws under which the contract could be held valid in accordance with the parties' presumed intention * * *." 59 Colum L Rev at 992.77
See also Ehrenzweig, The Conflict of Laws (1962) at page 353; Kossick v. United Fruit Co., 365 US 731, 81 S Ct 886, 6 L Ed2d 56 (1961); and Pritchard v. Norton, 106 US 124, 1 S Ct 102, 27 L Ed 104 (1882).78
The transaction in the case at bar has adequate contacts with the state of California to make California law appropriate, and the law of California would uphold the validity of the contract. The presumed  intentions of the parties would be carried out if the contract were enforced.79
In recent years a number of courts have adopted the "center of gravity" or "points of contact" approach to solve problems concerning contracts and the conflict of laws. Stumberg, supra, at 240. These courts rely on the law of the place which has the most significant contacts with the matter in dispute. Auten v. Auten, 308 NY 155, 161, 124 NE2d 99, 50 ALR2d 246 (1954). The merit of the center-of-gravity approach is that the place having the most interest in the problem is given control over the legal issues arising out of the factual situation. Auten v. Auten, supra at 161. One difficulty with this approach is that it is somewhat wanting in predictability because of the subjective evaluations that may enter into the finding of the "center of gravity." See Currie and Schreter, supra at 1328.80
The tentative draft of the Restatement (Second) adopts the center-of-gravity theory to determine the validity of contracts:81
"(1) The validity of a contract is determined by the local law of the state with which the contract has its most significant relationship, except in the case of usury (see § 334d)." Restatement (Second), Conflict of Laws § 332 (Tent. Draft No. 6, 1960) at 6.82
The proposed draft also sets out guidelines to determine, in particular instances, the state "with which the contract has its most significant relationship." The draft adopts the following language:83
"(a) if the place of contracting and the place of performance are in the same state, the local law of this state determines the validity of the contract, except in the case of usury (see § 334d)  and as stated in §§ 346e to 346n * * *." Restatement (Second), Conflict of Laws § 332b (Tent. Draft No. 6, 1960) at 30.84
In Jansson v. Swedish American Line, 185 F2d 212, 30 ALR2d 1385 (1st Cir, 1950), the United States Court of Appeals discussed the application of the center-of-gravity theory in contract cases. The court stated:85
"* * * But at least where the contract contains no explicit provision that it is to be governed by some particular law, what the courts applying this intention test actually seem to do is to examine all the points of contact which the transaction has with the two or more jurisdictions involved, with a view to determine the `center of gravity' of the contract, or of that aspect of the contract immediately before the court; and when they have identified the jurisdiction with which the matter at hand is predominantly or most intimately concerned, they conclude that this is the proper law of the contract which the parties presumably had in view at the time of contracting * * *." 185 F2d at 218-219.86
See also Kievit v. Loyal Protect. Life Ins. Co., 34 NJ 475, 492, 170 A2d 22, 32 (1961); Boston Law Book v. Hathorn, 119 Vt 416, 423-424, 127 A2d 120, 125 (1956); Note, 17 Vand L Rev 283, esp. footnote 18 at page 286.87
On the basis of the general theory adopted by the Restatement (Second), supra, the guidelines presented in the Restatement, and the method of application of the center-of-gravity principle outlined in the Jansson case, the law of California would be the law applicable if the trial of the instant case were being held in a neutral state. The majority opinion virtually concedes that both the rule of validation and the center-of-gravity  theory point to the application of California law. The majority says, however, that these established principles of conflict of laws should give way to the "public policy" of Oregon.88
The case of Haag v. Barnes, 9 NY2d 554, 175 NE2d 441, 87 ALR2d 1301 (1961), illustrates the way in which the Court of Appeals of New York dealt with a somewhat similar situation. Although the facts in the Haag case were unlike those in the instant case, the reasoning of the court is instructive. In the Haag case, a legal secretary who lived in New York worked for an Illinois lawyer whenever he came to New York on business. The secretary alleged that during the course of this relationship they became intimate and she became pregnant by the defendant. She went to Illinois to have her child, and the parties entered into an agreement in Illinois whereby the defendant agreed to pay $275 per month to the plaintiff until the child reached the age of sixteen. The parties stipulated that the laws of Illinois were to govern the validity of the contract. Under the law of Illinois the agreement was valid.89
The plaintiff contended later that the agreement was unenforceable because it did not receive court approval as required by New York statute. The court held that she was bound by it, notwithstanding the failure of the agreement to meet the requirements of the New York statute. While contrary to a local statute, the agreement did not offend the public policy of New York. See 16 Okla L Rev 427, 430 (1963).90
In Bernkrant v. Fowler, 55 Cal2d 588, 360 P2d 906 (1961), the court weighed the various considerations involved in making a choice of law and enforced an oral agreement made in Nevada against the contention  that it was unenforceable under the California statute of frauds. The opinion, by Traynor, J., carefully considered the precedents, and concluded that by enforcing the agreement as the parties made it, the common policy of both states in favor of enforcing contracts should prevail in the face of the local statute which made unenforceable certain oral contracts when made in California.91
In both the Haag case and the Fowler case, local statutes announced a "public policy." In each case, however, the local court recognized the validity of considerations that were of greater legal importance than the local policy. In each case the contract in question had substantial relationships with a state other than that of the forum. These relationships created interests deserving of protection.92
In the case before us, I believe that the policy of both states, Oregon and California, in favor of enforcing contracts, has been lost sight of in favor of a questionable policy in Oregon which gives special privileges to the rare spendthrift for whom a guardian has been appointed.93
The majority view in the case at bar strikes me as a step backward toward the balkanization of the law of contracts. Olshen v. Kaufman, 235 Or 423, 385 P2d 161 (1963), held that there was a policy in this state to help keep spendthrifts out of the almshouse. I can see nothing, however, in Oregon's policy toward spendthrifts that warrants its extension to permit the taking of captives from other states down the road to insolvency.94
I would enforce the contract.95
 Currie criticizes this case. Currie, Selected Essays on the Conflict of Laws, 421 (1963), reprint from 1960 Duke L J 1.
District of Columbia Court of Appeals.
 Richard W. Boone, Washington, D.C., with whom Lori J. Lustig, Washington, D.C., was on the brief, for appellant Kaiser-Georgetown Community Health Plan, Inc., R. Harrison Pledger, Jr., McLean, Va., for appellant Capital Area Permanente Medical Group, P.C. J. Kathleen O'Shea Poux, Silver Spring, Md., also entered an appearance for appellant Capital Area Permanente Medical Group, P.C.8
Thomas P. Mains, Jr., Alexandria, Va., with whom Robert Cadeaux, Washington, D.C., was on the brief, for appellee.9
Before PRYOR, Chief Judge, and NEBEKER and MACK, Associate Judges.10
This case presents a choice-of-law issue in the context of a medical malpractice action. Defendants, appellants here, are two District of Columbia corporations, Kaiser-Georgetown Community Health Plan, Inc. (Kaiser), a health maintenance organization (HMO), and Capital Area Permanente Medical Group, P.C. (Capital), a provider of health care that has contracted to provide health care services at medical facilities operated by Kaiser.12
Plaintiff-appellee, Mary Stutsman, is a resident of Arlington County, Virginia, and is employed in the District. Mrs. Stutsman was enrolled as a Kaiser HMO subscriber and received health care from several physicians employed by Capital at Kaiser's Springfield, Virginia, medical facility. She brought this action in the Superior Court for malpractice arising out of the alleged negligence of Capital's employees. In the complaint, recovery is sought only as against Kaiser and Capital under a theory of respondeat superior.13
In the trial court, the defendants moved to dismiss the complaint on several grounds, each premised on their contention that Virginia law should be applied to this action. Defendants argued, first, that the courts of the District of Columbia are an "inconvenient forum" for an action governed by Virginia law, and that the case should therefore be dismissed based on the doctrine of "forum non conveniens"; second, that dismissal is warranted because the plaintiff did not comply with the administrative prerequisites created by Virginia statute to the filing of a malpractice complaint, see infra; and third, that the Virginia statute of limitations bars the action. The defendants asked in the alternative that the trial court apply the Virginia law of negligence to the case.14
The court, Judge Goodrich presiding, refused to dismiss the complaint on any of the grounds asserted by the defendants. In addition, the court found that the District of Columbia has a strong interest in this litigation, and accordingly held that the law of the District would be applied to the plaintiff's cause of action. We affirm.15
Mary Stutsman was employed as a registered nurse at Georgetown University. As an employment benefit, beginning in January of 1981, she became enrolled as a  subscriber to Kaiser's health plan. Kaiser is a District of Columbia corporation and its corporate offices are located in the District. Kaiser maintains several health care facilities in the District of Columbia metropolitan area.17
Stutsman became pregnant in the Spring of 1981, and in June of that year she sought prenatal care under the Kaiser plan at the Kaiser facility closest to her home, in Springfield, Virginia. She became aware of a nodule in her right breast in August of 1981, and she alleges that she brought it to the attention of physicians employed at the clinic on several occasions commencing in September of that year. The clinic's physicians are employees of appellant Capital, which is a District of Columbia corporation that contracts with Kaiser to provide health care in Kaiser facilities in the District and surrounding suburbs. Based on manual palpation, the Capital employees diagnosed the nodule as benign. Stutsman alleges that despite the increasing size of the mass from September of 1981 until her child's delivery in January of 1982, her physicians took no diagnostic steps to determine its character, other than palpation.18
In January of 1982, Stutsman was referred by Kaiser to a surgeon at Georgetown University Hospital, who performed a biopsy that revealed the malignant character of the mass. Stutsman alleges that the failure by the Capital physicians to take adequate steps to diagnose her illness represents care below the standard required of physicians. She further contends that as a result of the delay in diagnosis, the cancer has mestastasized and her chances of surviving the disease are correspondingly diminished. Stutsman brought this action against Kaiser and Capital in the Superior Court requesting damages for negligence in the amount of ten million dollars.19
Appellants contend that the law of Virginia must be applied to this action because certain facts in this case—the plaintiff's residence in Virginia and her treatment there—demonstrate that Virginia has the most substantial contact with the events underlying the claim, and therefore the greater interest in the application of its law. They further argue that Virginia has a substantial public policy interest in limiting liability of providers of health care operating within that State. In this regard, the common law of malpractice has been modified in Virginia by the Virginia Medical Malpractice Act, 2 Va. Code §§ 8.01-581.1 to 8.01-581.20 (Michie Supp. 1984). For acts of malpractice by "health care providers" occurring after April 1977 and prior to October 1983, the Act sets a $750,000 cap on liability, id. § 8.0-581.15. Appellants maintain that they are "health care providers" within the meaning of the Act, that its liability-limiting provisions are therefore applicable to them, and that to apply District law (which does not limit liability) would frustrate the public policy of the State of Virginia expressed in the Malpractice Act.21
Appellants contend that the applicability of the Malpractice Act makes the courts of the State of Virginia the most appropriate forum for resolution of this controversy. They therefore conclude that this action should have been dismissed without prejudice because it was brought in an "inconvenient" forum. Since we conclude that District of Columbia law should be applied to this case, we need not reach this question. We note, however, that had this case been dismissed on the grounds of forum  non conveniens, the plaintiff's access to Virginia courts would not have been assured, for appellants simultaneously argue that the Virginia statute of limitations bars this action.22
The trial court, Honorable Stephen F. Eilperin presiding, initially denied the motion to dismiss without opinion. Defendants filed a motion under Super.Ct.Civ.R. 59(e) to vacate or to alter or amend Judge Eilperin's order. Following a hearing, the court, Judge Goodrich presiding, declined to dismiss the action on any of the grounds urged by the defendants. The court concluded:23
[I]t is doubtful that the defendant protective policies of the Virginia Medical Malpractice Act are relevant at all if it would seem that the State of Virginia has little, if any, interest in protecting foreign, non-licensed health care providers from liability. To put it another way, application of D.C. law would in no wise undermine the stated policy of the State of Virginia to limit the liability of its licensed health care providers. Conversely, application of Virginia law to these D.C. Corporations would greatly undermine the policy of this jurisdiction (implicit by its rejection of artificial limits of recovery) to hold its residents liable for the full extent of their conduct.24
Appellants argue that the trial court's determination that they are not within the ambit of the Virginia Malpractice Act was error, that the contacts between the events here at issue and the State of Virginia are substantial, and that the public policy of the State of Virginia accordingly would be frustrated by the application of District law to the action. We address each of these contentions in turn.25
The Virginia Malpractice Act is applicable to malpractice claimants and to defendants who are "health care providers" as the Act defines that term. The Act modifies the law of negligence in malpractice cases in Virginia in two ways. First, it creates a panel review procedure that either party may invoke; and once invoked, the claimant may not file suit until the process is completed. Second, the Act limits the amount of recovery permitted against "health care providers" in malpractice actions.27
The Act's definitional section provides:28
"Health care provider" means a person, corporation, facility or institution licensed by this Commonwealth to provide health care or professional services as a physician or hospital, dentist, pharmacist, registered or licensed practical nurse, optometrist, podiatrist, chiropractor, physical therapist, physical therapy assistant, clinical psychologist or a nursing home... or an officer, employee or agent thereof acting in the course and scope of his employment.29
2 Va. Code § 8.01-581.1(1). Health maintenance organizations are not specifically included within this list of "health care providers" covered by the Act. An initial question is whether health maintenance organizations are "corporation[s] ... provid[ing] services as a physician or hospital" under the Act. The trial court appeared to  decide this question in the negative, and its finding comports generally with Virginia statutory language. HMOs operating in Virginia are required to be licensed, under a Virginia statute enacted in 1980, 6A Va. Code § 38.1-865 (Michie Supp.1981). The Malpractice Act has been amended in every subsequent year, but HMOs have never explicitly been included within the "health care provider" definition of § 8.01-581.1(1). Thus, although the language of the Malpractice Act may include actions alleging respondeat superior liability brought against professional corporations like Capital, it does not explicitly encompass actions against HMOs like Kaiser.30
We think it most appropriate, however, for the state courts of Virginia to decide in the first instance whether an action alleging respondeat superior liability of an HMO for the acts of employees who indisputably are "health care providers" within the meaning of the statute, is subject to the Malpractice Act's provisions. Accordingly, we decline to decide (nor need we for our purposes here) whether, if Virginia law were applicable to this action, the notice of claim, panel review, and liability cap provisions of the malpractice statute would be properly invoked.31
Assuming, without deciding, that appellants are correct in their prediction that a Virginia court would decide to apply the Malpractice Act to protect both defendants in these circumstances, we nevertheless use our own choice-of-law principles to determine the law to be applied in an action filed in our courts, over which we indisputably have jurisdiction.33
In this case we have before us "a set of facts giving rise to a lawsuit [that] justif[ies], in constitutional terms, application of the law of more than one jurisdiction." Allstate Insurance Co. v. Hague, 449 U.S. 302, 307, 101 S.Ct. 633, 637, 66 L.Ed.2d 521 (1981) (plurality opinion). Appellants describe this case as involving "conduct occurring entirely within the Commonwealth of Virginia and asserted by one Virginia resident against two corporate residents of Virginia." Brief for Appellants at 1. The case could just as easily be described as involving the vicarious liability of two District of Columbia corporations for medical malpractice upon a member of the District's workforce residing in the D.C. metropolitan area, whose relationship with the defendants grew out of her employment status within the District. See Allstate, 449 U.S. at 315 n. 21, 101 S.Ct. at 641 n. 21.34
Mrs. Stutsman's Virginia residence, contrary to appellants' assertion, does not mandate the application of Virginia law to this action, see id. at 315, 101 S.Ct. at 641. At the time of the injury, Stutsman was employed within the District, and "[e]mployment status is not a sufficiently less important status than residence," when combined with other contacts, to prohibit our use of District of Columbia law and to require us to apply Virginia law here, id. at 317, 101 S.Ct. at 642.35
Similarly, we need not give controlling significance to the fact that the misdiagnosis of plaintiff's disease by employees of the defendants occurred in Virginia. A tort "need not occur within a particular jurisdiction for that jurisdiction to be connected to the occurrence. Numerous cases have applied the law of a jurisdiction other than the situs of the injury where there existed some other link between that jurisdiction and the occurrence." Id. at 314 & n. 19, 101 S.Ct. at 640 & n. 19 (citations omitted). Most jurisdictions have rejected the "wooden lex loci delicti doctrine," id. at 316 n. 22, 101 S.Ct. at 642, which in the past was the majority rule of decision governing choice-of-law in tort cases. See Myers v. Gaither, 232 A.2d  577, 583 (D.C.1967) (recognizing that "a strict rule of lex loci is not infrequently inadequate"), aff'd, 131 U.S.App.D.C. 216, 404 F.2d 216 (1968). Where the location of the injury may be described as "fortuitous," the court is not bound by the law of the place of the tort.36
In Hitchcock v. United States, 214 U.S. App.D.C. 198, 204, 665 F.2d 354, 360 (1981), for example, the circuit court applied District law to an action against the United States government alleging that a Virginia resident was injured as a result of an immunization administered at a Virginia clinic, where the clinic's services were provided under a health plan sponsored by the U.S. Department of State. The court described the place of the injury as "fortuitous," id., in light of the fact that the relationship of the parties to the litigation was centered in the District; the court therefore applied the District's standard of care to the action.37
Conversely, in Williams v. Rawlings Truck Line, Inc., 123 U.S.App.D.C. 121, 125, 357 F.2d 581, 585 (1965), the fact that an automobile accident took place in the District was an insufficient contact with this forum to warrant the application of D.C. law to a subsequent negligence action, where other contacts between the parties and the action were with the State of New York, and New York had a substantial interest in the application of its rules. The place of the accident in Williams was described as "wholly fortuitous," id., and District of Columbia rules of decision were therefore held inapplicable.38
The relationship between the parties to the instant litigation can be described as centering around the District of Columbia, since the agreement to provide health care was a benefit of the plaintiff's District employment. The contract for health services between the parties does not specify that the plaintiff would be treated at Kaiser's Virginia clinic. Appellants do not take issue with plaintiff's assertion that she could have as easily requested treatment at the clinic closest to her workplace, in the District. In this sense, the happenstance of the alleged misdiagnosis in Virginia could be characterized as a "fortuity."39
Further, there is nothing so "arbitrary or fundamentally unfair" amounting to a denial of due process in the adjudication of these defendants' negligence by the standards of the District, see Allstate, 449 U.S. at 313, 320, 101 S.Ct. at 640, 644 (Opinion of Brennan, J.); id. at 326, 101 S.Ct. at 647 (Stevens, J., concurring). Both defendants are District of Columbia corporations, with primary places of business here. Neither can "claim unfamiliarity with the laws of [this] jurisdiction [or] surprise that the state courts might apply forum law to litigation in which [they are] involved." Id. at 317-18, 101 S.Ct. at 642-43 (Opinion of Brennan, J.). There can be no "unfair surprise" to these defendants nor any "frustration of legitimate expectations" in our application of the District's law of negligence, for the defendants were aware that the plaintiff was both a resident  of the metropolitan area and a District employee. In addition, at the time the plaintiff became enrolled in the Kaiser plan, the defendants had no expectation that she would patronize only the Virginia clinic.40
Although we are not bound to apply Virginia law here, we should choose to do so if, under our choice-of-law principles, we find that Virginia's interest in this litigation is substantial, and that application of District law would frustrate a clearly articulated public policy of that state.41
In tort cases our decisions have used "governmental interests" analysis to determine whether we will apply our law to an action. Williams v. Williams, 390 A.2d 4, 5 (D.C.1978); Myers v. Gaither, 232 A.2d 577, 583 (D.C.1967), aff'd, 131 U.S.App.D.C. 216, 404 F.2d 216 (1968); see Biscoe v. Arlington County, 238 U.S.App.D.C. 206, 214, 738 F.2d 1352, 1360 (1984), cert. denied, ___ U.S. ___, 105 S.Ct. 909, 83 L.Ed.2d 923 (1985); In re Air Crash Disaster Near Saigon, South Vietnam on April 4, 1975, 476 F.Supp. 521, 526 (D.D.C.1979). This approach requires us "to evaluate the governmental policies underlying the applicable laws and to determine which jurisdiction's policy would be most advanced by having its law applied to the facts of the case under review." Williams, 390 A.2d at 5-6. "When the policy of one state would be advanced by application of its law, and that of another state would not be advanced by application of its law, a false conflict appears and the law of the interested state prevails." Biscoe, 238 U.S.App. D.C. at 214, 738 F.2d at 1360. A true conflict is presented when both states have an interest in applying their own laws to the underlying facts; in that event, the forum law will be applied unless the foreign state has a greater interest in the controversy. Id.; see Mazza v. Mazza, 154 U.S.App.D.C. 274, 280-81, 475 F.2d 385, 391-92 (1973) (law of Maryland applied since Maryland had a "significant interest" in the controversy and there was no corresponding "strong local policy" of the District at stake in the litigation requiring application of District rule); In re Air Crash Disaster, 476 F.Supp. at 526 & n. 11.42
An analysis of the competing interests of the District of Columbia and of Virginia in the application of their own laws and furtherance of their separate public policies in this litigation reveals no real conflict.43
The District of Columbia has a substantial interest in this litigation. Both defendants are corporate citizens of the District of Columbia. The District has a significant interest, reflected in the fact that it imposes no cap on liability for malpractice, in holding its corporations liable for the full extent of the negligence attributable  to them. See Allstate, 449 U.S. at 318, 101 S.Ct. at 642 (Opinion of Brennan, J.).44
In addition, the District has an interest in protecting a member of its work force who contracts for health services with a District of Columbia corporation within this forum and then is injured by the negligence of that corporation's agents. The plurality opinion in Allstate recognized a plaintiff's employment status within the forum state as "a very important contact" for choice of law purposes. 449 U.S. at 313, 101 S.Ct. at 640. The importance of this contact derives from the fact that "[t]he State of employment has police power responsibilities towards the nonresident employee that are analogous, if somewhat less profound, than towards residents." Id. at 314, 101 S.Ct. at 640. The work force of the forum state, wrote Justice Brennan, "is surely affected by the level of protection the State extends to it, either directly or indirectly. Vindication of the rights of [a plaintiff who is employed within the forum state], therefore, is an important state concern." Id. at 315, 101 S.Ct. at 641.45
Justice Powell, in his dissent in Allstate, agreed that forum employment "provides a significant contact for furtherance of some local policies," id. at 338-39, 101 S.Ct. at 653-54, but argued that forum employment should be considered a sufficiently substantial contact to ground the use of local law by a court of the forum to decide the case only if the plaintiff's employment "form[s] a reasonable link between the litigation and a state policy," id. at 334, 101 S.Ct. at 651. In other words, in the dissent's view, a state may use the plaintiff's employment within the forum as a basis for application of its own law only when there is "some connection between the facts giving rise to the litigation and the scope of the State's lawmaking jurisdiction." Id.46
In Allstate, Minnesota had applied its law to an insurance dispute between a Wisconsin resident and a corporation doing business in Wisconsin and Minnesota; the dispute arose out of an accident between two Wisconsin residents. The Allstate plurality's decision upholding Minnesota's choice of law was based, inter alia, on the plaintiff's Minnesota employment. The dissent found no link between the plaintiff's forum employment and the litigation sufficient to uphold Minnesota's choice of law, for none of the issues involved in the litigation was "in any way affected or implicated by the [plaintiff's] employment status." Id. at 339, 101 S.Ct. at 653 (Powell, J., dissenting).47
In this case, in contrast, the relationship between the parties to the litigation grew out of the plaintiff's employment within the District. Even the dissent in Allstate, we believe, would uphold our choice of District law in this case, for the facts demonstrate the link required by Justice Powell between the plaintiff's employment here and the relationship between the parties that gave rise to the litigation.48
We have found both significant contacts between the facts underlying this action and this forum, and a substantial interest by the District of Columbia in the application of its law to the case. We proceed to consider the corresponding interests of the State of Virginia.49
Although Virginia undoubtedly has an interest in the welfare of its residents, the Malpractice Act, which appellants contend is the applicable Virginia law, cannot be said to further that interest in these circumstances. The above-described screening process that in most cases is a prerequisite to suit in malpractice cases, together with the cap on ultimate liability, were enacted into law by the State with the primary purpose of protecting Virginia health care providers from excessive liability. The statute may also have the effect of lowering malpractice premiums for health care providers operating in Virginia. Thus, Virginia residents may be benefited incidentally by the Act in that the cost of medical malpractice insurance passed on to them through medical fees will be less than it would have been had the statute not been enacted. Nonetheless, the primary purpose  of the Act is to protect Virginia health care providers from claimants who seek to recover damages in excess of the amount the Virginia legislature has deemed to be generally acceptable. Virginia undoubtedly has a general interest in the full compensation of its residents for injuries incurred by the negligence of another. Virginia has determined, however, that in the area of medical malpractice, its public policy interest in the limitation of liability of health care provider defendants may outweigh its interest in the full compensation of injured plaintiffs. Thus the Malpractice Act, which appellants argue would be applicable here if we were to decide the case under Virginia law, can in no sense be said to protect the interests of plaintiffs like Mrs. Stutsman.50
Although the Malpractice Act applies to all "health care providers" (as the Act defines that term) that are licensed to provide health care in the State of Virginia, the State's interest in the application of its statute becomes attenuated when its intended beneficiaries are foreign corporations with principal places of business outside the State. This is so because the financial impact upon foreign defendants of a finding of liability in excess of the statutory cap will not fall most heavily within Virginia. See Hitchcock, 214 U.S.App.D.C. at 204, 665 F.2d at 360. Any financial impact that the State is likely to experience will derive not from the liability of these defendants but from the uncompensated injury of this plaintiff.51
It is undoubtedly true that these defendants would be better served were we to apply Virginia's Malpractice Act here. Nevertheless, the interests of the State of Virginia and of these defendants are not identical. The above analysis reveals that the District has a substantial interest in this litigation, and that Virginia's interests would in fact be well-served, and its public policy not contravened, by the application of District law to the action. Accordingly, we affirm the trial court's decision that the District of Columbia's law of negligence is the most appropriate rule of decision in this case.52
 There is no connection between Georgetown University and Kaiser-Georgetown Community Health Plan, Inc.54
 This section of the Malpractice Act was amended in 1983 to provide for a cap of $1 million for acts of malpractice occurring on or after October 1, 1983. Since the events at issue here occurred prior to that date, the $750,000 cap would be applicable to this case were we to hold, first, that Virginia law must be applied as the rule of decision, and second, that the Act covers negligence attributable to Kaiser and Capital. See infra.55
 The trial court certified the action under D.C. Code § 11-721(d) (1981) for interlocutory appeal on matters not appealable as a matter of right. Defendants then filed an appeal on the denial of the motion based on forum non conveniens (No. 84-1398) (appeal as of right), and an interlocutory appeal on all other issues (No. 84-1470). This court consolidated the two appeals and ordered expedited briefing and argument.56
 The Act requires any claimant to file a notice of claim to the health care provider, 2 Va. Code § 8.01-581.2, and under that section either the claimant or the provider may request a hearing before a medical review panel established in § 8.01-581.3. If a hearing is requested, under § 8.01-581.2 the claimant may not file suit until the panel has issued an opinion (see § 8.01-581.7, setting forth duty of panel). That opinion is not conclusive in a court of law, but is admissible as evidence, § 8.01-581.8.57
 2 Va. Code § 8.01-581.15. See supra note 2.58
 In her compalint, Mrs. Stutsman does not allege any direct negligence of Kaiser or Capital in hiring or supervising their physician-employees. Mrs. Stutsman is thus seeking to hold Kaiser and Capital liable under a respondeat superior theory for the alleged negligence of their employees.59
 The court in Hitchcock analogized the government defendant "to a corporation of national scope headquartered in Washington with a clinic... in Virginia," 214 U.S.App.D.C. at 204, 665 F.2d at 360, not unlike appellants here. Thus, the failure by medical personnel at the Virginia clinic in Hitchcock to warn the plaintiff of the risks of the vaccine administered was attributable to action or inaction by the Washington "headquarters," id. at 203, 665 F.2d at 359. Similarly, Mrs. Stutsman may be able to prove at trial that the decision by several Capital physicians at the Kaiser clinic in Virginia to delay referring her to an outside physician for diagnostic testing is attributable to a policy originating with one or both appellant corporations to discourage outside referrals for financial reasons.60
 A major concern of all three opinion writers in Allstate, in evaluating a claim that application of forum law denied a defendant due process, is that the State should refrain from frustrating the defendant's legitimate expectations as to the standards by which he would be governed in the event of suit. 449 U.S. at 318 n. 24, 101 S.Ct. at 643 n. 24 (Opinion of Brennan, J.); id. at 324 n. 11, 327 & n. 16, 329-30 n. 22, 330 & n. 23, 331, 101 S.Ct. at 646 n. 11, 647 & n. 16, 648-49 n. 22, 649 & n. 23, 649 (Stevens J., concurring); id. at 336, 101 S.Ct. at 652 (Powell, J., dissenting).61
 In this regard, we note with approval the remarks of the circuit court in Gaither v. Myers,131 U.S.App.D.C. 216, 223, 404 F.2d 216, 223 (1968):62
It is true that [the District's] compensatory policy has the greatest relevance to cases when the mishap occurs in the District and when District residents are plaintiffs. However, to confine the benefits of the [District's] rule to the territory ceded by the states of Maryland and Virginia to form the Nation's Capital would be to shun the present reality of the economically and socially integrated greater metropolitan area. It is a commonplace that residents of Maryland [and Virginia] are part of the Washington metropolitan trading area, and that District residents and businesses have an interest in the well-being of the citizens of [those] State[s].
 "The forum State's interest in the fair and efficient administration of justice" together with the "substantial savings [that] can accrue to the State's judicial system" when its judges are "able to apply law with which [t]he[y are] thoroughly familiar or can easily discover," tilt the balance in favor of applying the law of the forum state when the interests of both jurisdictions are equally weighty. See Allstate, 449 U.S. at 326 & n. 14, 101 S.Ct. at 647 & n. 14 (Stevens, J., concurring).64
 Further, the fact that jurisdiction over the defendants in our courts is therefore "unquestioned [is] a factor not without [constitutional] significance" in assessing the applicability of District law to this case. Allstate, 449 U.S. at 317 n. 23, 101 S.Ct. at 642 n. 23 (Opinion of Brennan, J.).65
 The court in Hitchcock noted:66
If a judgment were sustained against the corporation, the financial burden would surely fall on the business as a whole, headquartered out-of-state, rather than on the individual clinic. Virginia would thus not have the usual interest in having its law decide the financial responsibility of one of its residents. Washington, correspondingly, would have some interest in having its law applied to decide the liability of a business headquartered there, at least where, as here, the District has other substantial contacts with the litigation.
214 U.S.App.D.C. at 204, 665 F.2d at 360. The Hitchcock analysis applies with equal force in this case.68
 Appellants' contention that the trial court abused its discretion in refusing to dismiss the complaint on the basis of forum non conveniens is grounded entirely on its assertion that Virginia law should be applied to this case. In light of our conclusion that the trial court did not err in ruling that the District of Columbia's law of negligence should be applied to the action, appellants' forum non conveniens argument needs no further discussion.
Supreme Court of California. In Bank.
Betty Aronow and George Rudiak for Appellants.7
Egley & Wiener and Paul Egley for Respondent.8
Plaintiffs appeal on the clerk's transcript from a judgment for defendant as executrix of the estate of John Granrud. They contend that the findings of fact do not support the judgment.10
Some time before 1954 plaintiffs purchased the Granrud Garden Apartments in Las Vegas, Nevada. In 1954 the property was encumbered by a first deed of trust given to secure an installment note payable to third parties and a second deed of trust given to secure an installment note payable to Granrud at $200 per month plus interest. Granrud's note and deed of trust provided for subordination to a deed of trust plaintiffs might execute to secure a construction loan. In July 1954, there remained unpaid approximately $11,000 on the note secured by the first deed of trust and approximately $24,000 on the note payable to Granrud. At that time Granrud wished to buy a trailer park and asked plaintiffs  to refinance their obligations and pay a substantial part of their indebtedness to him. At a meeting in Las Vegas he stated that if plaintiffs would do so, he would provide by will that any debt that remained on the purchase price at the time of his death would be cancelled and forgiven.plaintiffs then arranged for a new loan of $25,000, the most they could obtain on the property, secured by a new first deed of trust. They used the proceeds to pay the balance of the loan secured by the existing first deed of trust and $13,114.20 of their indebtedness to Granrud. They executed a new note for the balance of $9,227 owing Granrud, payable in installments of $175 per month secured by a new second deed of trust. This deed of trust contained no subordination provision. The $13,114.20 was deposited in Granrud's bank account in Covina, California and subsequently used by him to buy a trailer park.plaintiffs incurred expenses of $800.90 in refinancing their obligations.11
Granrud died testate on March 4, 1956, a resident of Los Angeles County. His will, dated January 23, 1956, was admitted to probate, and defendant was appointed executrix of his estate. His will made no provision for cancelling the balance of $6,425 due on the note at the time of his death.plaintiffs have continued to make regular payments of principal and interest to defendant under protest.12
Plaintiffs brought this action to have the note cancelled and discharged and the property reconveyed to them and to recover the amounts paid defendant after Granrud's death. The trial court concluded that the action was barred by both the Nevada and the California statute of frauds; that to remove the bar of the statutes, the action must be one for quasi-specific performance in which an heir or beneficiary under the will would be an indispensable party; and that defendant was not estopped to rely on the statutes of frauds.13
 Probate Code, section 573, provides that "Actions for the recovery of any property, real or personal, or for the possession thereof, or to quiet title thereto, or to enforce a lien thereon, or to determine any adverse claim thereon, and all actions founded upon contracts ... may be maintained by and against executors and administrators in all cases in which the cause of action whether arising before or after death is one which would not abate upon the death of their respective testators or intestates. ..." Since the present action is founded on contract and involves an adverse claim to an interest in real property, it was properly brought against  the executrix pursuant to this section. Moreover, since plaintiffs do not seek to enforce a trust against any of the beneficiaries of the estate, none of the beneficiaries is an indispensable party. (Cf. Bank of California v. Superior Court, 16 Cal.2d 516, 524 [106 P.2d 879].) Apart from seeking the recovery of sums paid directly to defendant to protect their interests pending the action, plaintiffs seek only a determination that pursuant to their contract with Granrud their liability on the note has been discharged and the security interest in the property thereby released. Under these circumstances defendant represents all those interested in the estate just as she would had she brought an action to enforce the note and been met with the defense that it had been discharged. (McCaughey v. Lyall, 152 Cal. 615, 616-618 [93 P. 681]; Patchett v. Webber, 198 Cal. 440, 448 [245 P. 422]; Estate of Kessler, 32 Cal.2d 367, 369 [196 P.2d 559]; Schroeder v. Wilson, 89 Cal.App.2d 63, 68-69 [200 P.2d 173]; Bank of America v. O'Shields, 128 Cal.App.2d 212, 217 [275 P.2d 153]; Cadigan v. American Trust Co., 131 Cal.App.2d 780, 781 [281 P.2d 332]; Beyl v. Robinson, 179 Cal.App.2d 444, 456 [4 Cal.Rptr. 18].)14
 Moreover, since plaintiffs do not seek a money judgment payable out of the assets of the estate but only a determination that their obligations have been discharged, they were not required to file a claim against the estate (see Prob. Code, 707) and were not precluded by subdivision 3 of section 1880 of the Code of Civil Procedure  from testifying to events occurring before Granrud's death. (Porter v. Van Denburgh, 15 Cal.2d 173, 176-177 [99 P.2d 265]; Savings Union Bank etc. Co. v. Crowley, 176 Cal. 543, 547 [169 P. 67]; Calmon v. Sarraille, 142 Cal. 638, 642 [76 P. 486]; Alvarez v. Ritter, 67 Cal.App.2d 574, 579- 580 [155 P.2d 83]; Streeter v. Martinelli, 65 Cal.App.2d 65, 71-73 [149 P.2d 725]; Beyl v. Robinson, 179 Cal.App.2d 444, 455-456 [4 Cal. Rptr. 18]; Sperry v. Tammany, 106 Cal.App.2d 694, 698 [235 P.2d 847]; Miller & Lux, Inc. v. Katz, 10 Cal.App. 576, 578 [102 P. 946]; see People v. Olvera, 43 Cal. 492, 494.) To the extent that it indicates that subdivision 3 of section 1880  is applicable in an action such as this one, Norgard v. Estate of Norgard, 54 Cal.App.2d 82 [128 P.2d 566], is inconsistent with the foregoing authorities and is disapproved.15
Subdivision 6 of section 1624 of the Civil Code provides that "An agreement which by its terms is not to be performed during the lifetime of the promisor, or an agreement to devise or bequeath any property, or to make any provision for any person by will" is "invalid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged or by his agent." (See also Code Civ. Proc., 1973, subd. 6.)plaintiffs concede that in the absence of an estoppel, the contract in this case would be invalid under this provision if it is subject thereto. They contend, however, that only the Nevada statute of frauds is applicable and point out that the Nevada statute has no counterpart to subdivision 6. Defendant contends that the California statute of frauds is applicable, and that if it is not, the Nevada statute of frauds covering real property transactions invalidates the contract. 16
We have found no Nevada case in point. We believe, however, that Nevada would follow the general rule in other jurisdictions, that an oral agreement providing for the discharge of an obligation to pay money secured by an interest in real property is not within the real property provision of the statute of frauds, on the ground that the termination of the security interest is merely incidental to and follows by operation of law from the discharge of the principal obligation. (Schweider v. Lang, 29 Minn. 254 [13 N.W. 33, 34, 43 Am.Rep. 202]; Givens v. Featherstone, (Tex.Civ.App.) 12 S.W.2d 613, 614]; Riley v. Atherton, 185 Ark. 425 [47 S.W.2d 568]; Brown v. Ruffin, 189 N.C. 262 [126 S.E. 613, 616]; First Nat. Bank v. Gallagher, 119 Minn. 463 [138 N.W. 681, 682, Ann.Cas. 1914B 120]; Runyan v. Mersereau, 11 Johns.  (N.Y.) 534, 538; Ackla v. Ackla, 6 Pa. 228, 230; McKenzie v. Stewart, 196 Ala. 241 [72 So. 109, 110]; Mutual Mill Ins. Co. v. Gordon, 12 Ill. 366 [12 N.E. 747, 750]; Benavides v. White, 94 Cal.App.2d 849, 850 [211 P.2d 597]; see also Wright v. Donaubauer, 137 Tex. 473 [154 S.W.2d 637, 639]; Rigney v. Lovejoy, 13 N.H. 247, 253; Dougherty v. Randall, 3 Mich. 581, 586; Flyer v. Sullivan, 284 App.Div. 697 [134 N.Y.S.2d 521, 523]; 2 Corbin on Contracts, pp. 394-397; contra, Parker v. Barker, 43 Mass. (2 Metc.) 423, 431-432; Duff v. United States Trust Co., 327 Mass. 17 [97 N.E.2d 189, 191]; Brooks v. Benham, 70 Conn. 92 [38 A. 908, 910, 39 A. 1112, 66 Am.St.Rep. 87]; Phillips v. Leavitt, 54 Me. 405, 407.)17
We are therefore confronted with a contract that is valid under the law of Nevada but invalid under the California statute of frauds if that statute is applicable.  We have no doubt that California's interest in protecting estates being probated here from false claims based on alleged oral contracts to make wills is constitutionally sufficient to justify the Legislature's making our statute of frauds applicable to all such contracts sought to be enforced against such estates. (See Rubin v. Irving Trust Co., 305 N.Y. 288, 298 [113 N.E.2d 424]; Emery v. Burbank, 163 Mass. 326-329 [39 N.E. 1026, 47 Am.St.Rep. 456, 28 L.R.A. 57].) The Legislature, however, is ordinarily concerned with enacting laws to govern purely local transactions, and it has not spelled out the extent to which the statute of frauds is to apply to a contract having substantial contacts with another state. Accordingly, we must determine its scope in the light of applicable principles of the law of conflict of laws. (See People v. One 1953 Ford Victoria, 48 Cal.2d 595, 598-599 [311 P.2d 480]; 2 Corbin on Contracts, p. 67; Currie, Married Women's Contracts, 25 U. Chi. L. Rev. 227, 230-231; Cheatham and Reese, Choice of the Applicable Law, 52 Columb. L. Rev. 959, 961.)18
 In the present case plaintiffs were residents of Nevada, the contract was made in Nevada, and plaintiffs performed it there. If Granrud was a resident of Nevada at the time the contract was made, the California statute of frauds, in the absence of a plain legislative direction to the contrary, could not reasonably be interpreted as applying to the contract even though Granrud subsequently moved to California and died here. (See McCabe v. Bagby, 186 F.2d 546, 550.) The basic policy of upholding the expectations of the parties by enforcing contracts valid under the only law apparently applicable would preclude an interpretation of our statute  of frauds that would make it apply to and thus invalidate the contract because Granrud moved to California and died here. Such a case would be analogous to People v. One 1953 Ford Victoria, 48 Cal.2d 595 [311 P.2d 480], where we held that a Texas mortgagee of an automobile mortgaged in Texas did not forfeit his interest when the automobile was subsequently used to transport narcotics in California although he had failed to make the character investigation of the mortgagor required by California law. A mortgagee entering into a purely local transaction in another state could not reasonably be expected to take cognizance of the law of all other jurisdictions where the property might possibly be taken, and accordingly, the California statute requiring an investigation to protect his interest could not reasonably be interpreted to apply to such out-of-state mortgagees. Another analogy is found in the holding that the statute of frauds did not apply to contracts to make wills entered into before the statute was enacted (Rogers v. Schlotterback, 167 Cal. 35, 45 [138 P. 728]).  Just as parties to local transactions cannot be expected to take cognizance of the law of other jurisdictions, they cannot be expected to anticipate a change in the local statute of frauds. Protection of rights growing out of valid contracts precludes interpreting the general language of the statute of frauds to destroy such rights whether the possible applicability of the statute arises from the movement of one or more of the parties across state lines or subsequent enactment of the statute. (See Currie and Schreter, Unconstitutional Discrimination in the Conflict of Laws:privileges and Immunities, 69 Yale L.J. 1323, 1334.)19
 In the present case, however, there is no finding as to where Granrud was domiciled at the time the contract was made. Since he had a bank account in California at that time and died a resident here less than two years later it may be that he was domiciled here when the contract was made. Even if he was, the result should be the same. The contract was made in Nevada and performed by plaintiffs there, and it involved the refinancing of obligations arising from the sale of Nevada land and secured by interests therein. Nevada has a substantial interest in the contract and in protecting the rights of its residents who are parties thereto, and its policy is that the contract is valid and enforcible. California's policy is also to enforce lawful contracts. That policy, however, must be subordinated in the case of any contract that does not meet the requirements of an applicable statute of  frauds. In determining whether the contract herein is subject to the California statute of frauds, we must consider both the policy to protect the reasonable expectations of the parties and the policy of the statute of frauds. (See Cheatham and Reese, Choice of the Applicable Law, 52 Columb. L. Rev. 959, 978- 980.) It is true that if Granrud was domiciled here at the time the contract was made, plaintiffs may have been alerted to the possibility that the California statute of frauds might apply. Since California, however, would have no interest in applying its own statute of frauds unless Granrud remained here until his death, plaintiffs were not bound to know that California's statute might ultimately be invoked against them. Unless they could rely on their own law, they would have to look to the laws of all of the jurisdictions to which Granrud might move regardless of where he was domiciled when the contract was made. We conclude, therefore, that the contract herein does not fall within our statute of frauds. (See 2 Corbin on Contracts, p. 76; Lorenzen, The Statute of Frauds and the Conflict of Laws, 32 Yale L.J. 311, 338; Ehrenzweig, The Statute of Frauds in the Conflict of Laws, 59 Columb. L. Rev. 874; Currie and Schreter, Unconstitutional Discrimination in the Conflict of Laws: Equal Protection, 28 U. Chi. L. Rev. 1, 51.) Since there is thus no conflict between the law of California and the law of Nevada, we can give effect to the common policy of both states to enforce lawful contracts and sustain Nevada's interest in protecting its residents and their reasonable expectations growing out of a transaction substantially related to that state without subordinating any legitimate interest of this state.20
The judgment is reversed.21
"3. Parties or assignors of parties to an action or proceeding, or persons in whose behalf an action or proceeding is prosecuted, against an executor or administrator upon a claim, or demand against the estate of a deceased person, as to any matter or fact occurring before the death of such deceased person."23
Section 111.210, subdivision 1, provides: "Every contract for the leasing for a longer period than one year, or for the sale of any lands, or any interest in lands, shall be void unless the contract, or some note or memorandum thereof, expressing the consideration, be in writing, and be subscribed by the party by whom the lease or sale is to be made."24
 1. Section 1880 provides: "The following persons cannot be witnesses: ...25
 2. Nevada Revised Statutes, section 111.205, subdivision 1, provides: "No estate or interest in lands, other than for leases for a term not exceeding one year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall be created, granted, assigned, surrendered or declared after December 2, 1861, unless by act or operation of law, or by deed or conveyance, in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by his lawful agent thereunto authorized in writing."
United States Court of Appeals, Sixth Circuit.
 Gary D. Greenwald (argued), Schottenstein, Zox, Dunn, Columbus, Ohio, for plaintiff-appellant.8
Karen A. Winters, Asst. Atty. Gen., Consumer Protection Div., Columbus, Ohio, for Amicus Curiae — State of Ohio in support of appellant.9
James L. Graham, Columbus, Ohio, Barry L. Eisenberg (argued), Lasser, Hochman, Marcus, Guryan, & Kuskin, Roseland, N.J., for defendant-appellee.10
Before MARTIN, MILBURN and BOGGS, Circuit Judges.11
Plaintiff Tele-Save Merchandising Company appeals the grant of defendant's motion for summary judgment in this diversity action brought under the provisions of 28 U.S.C. § 1332(a). Tele-Save's original complaint contained four allegations against Consumers Distributing Company, Ltd.; count one, alleging violations of the Ohio Business Opportunity Plans Act, is the sole subject of this appeal. For the reasons set forth below we affirm the decision of the district court.13
Tele-Save was an Ohio corporation with its principal place of business in Columbus, Ohio. Consumers is a Canadian corporation with an office in New Jersey. In early 1981, the parties began negotiation of an agreement whereby Consumers, a large chain of catalog showroom operators, would supply products and services to Tele-Save. Tele-Save would in turn operate as a catalog retail showroom under the direction of Consumers. An agreement was reached in late July 1981. Paragraph 17 of the agreement reads:14
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey.15
Tele-Save opened its store in late September 1981 offering for sale general merchandise received from Consumers and from other suppliers who advertised in the Consumers catalog. In January 1982, Consumers notified Tele-Save that it was cancelling its catalog program. Tele-Save asked Consumers to reimburse the cost of merchandise purchased through the agreement and to accept its return. Consumers's refusal prompted this lawsuit.16
Count one of Tele-Save's complaint, and the only issue presented on this appeal, charged Consumers with violating Ohio's Business Opportunity Plans Act, Ohio Revised Code Chapter 1334. The Act, which took effect in October 1979, regulates the sale of business opportunity plans and provides certain rights and remedies for Ohio purchasers who are defrauded by dishonest or negligent sellers. Specifically, Tele-Save alleged Consumers violated section  1334.02 by failing to provide a written disclosure statement in connection with the transaction, section 1334.03 by failing to make certain disclosures regarding potential sales, income, and profits, by making false and misleading statements, and by accepting a down payment in excess of twenty percent of the initial payment, and section 1334.06 for failing to give the required notice of cancellation and failing to follow specific procedures with regard to cancellation.17
Consumers filed a motion for summary judgment arguing that the Ohio Act was inapplicable to its agreement with Tele-Save because paragraph 17 of the agreement stipulated that the contract would be governed by New Jersey law. Tele-Save opposed the motion, arguing that the contractual choice-of-law provision was ineffective because application of New Jersey law violated a fundamental public policy of Ohio and because Ohio had a materially greater interest in the resolution of the dispute than New Jersey. The district court granted the defendant's motion and never reached the merits of the claim of violations of the Act.18
Federal courts sitting in diversity must apply the choice-of-law principles of the forum. Klaxon Co. v. Stentor Electric Manufacturing Company, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Accordingly, Ohio choice-of-law principles are applicable in this case.19
The Ohio Supreme Court in considering the deference to give contractual choice-of-law provisions has adopted the guidelines of the Restatement (Second) of Conflict of Laws, § 187(2) (1971):20
The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either21
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or22
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.23
Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Company, 6 Ohio St.3d 436, 438-39, 453 N.E.2d 683 (1983).24
Ohio's receptivity to contractual choice-of-law was further discussed in the recent decision of Jarvis v. Ashland Oil, Inc., 17 Ohio St.3d 189, 478 N.E.2d 786 (1985). In Jarvis, the Ohio Supreme Court held that "where the parties to a contract have made an effective choice of the forum law to be applied, the Restatement of the Law 2d, Conflict of Laws (1971) 561, Section 187(2), will not be applied to contravene the choice of the parties as to the applicable law." Id. 17 Ohio St.3d at 192, 478 N.E.2d 786. The court then added a narrow limitation to this rule: "[W]here the law of the chosen state sought to be applied is concededly repugnant to and in violation of the public policy of [Ohio], the law of Ohio will only be applied when it can be shown that [Ohio] has a materially greater interest than the chosen state in the determination of the particular issue." Id.25
These recent comments by the Ohio Supreme Court indicate that Ohio choice-of-law principles strongly favor upholding the chosen law of the contracting parties. We see no reason to disturb the parties' choice absent the application of another state's law that would be concededly repugnant to Ohio public policy.26
Tele-Save contends that the contractual choice-of-law provision should be ignored in this case and that Ohio law should be applied because of a non-waiver provision found in the Ohio Business Opportunity Plans Act. Section 1334.15 of the Act states:27
The remedies of sections 1334.01 to 1334.15 of the Revised Code are in addition to remedies otherwise available for the same conduct under federal, state, or  local law. Any waiver by a purchaser of sections 1334.01 to 1334.15 of the Revised Code is contrary to public policy and is void and unenforceable.28
Tele-Save argues that because the Ohio legislature chose to adopt the Act, including section 1334.15, we must infer that the application of another state's law would be contrary to a fundamental public policy of Ohio and that Ohio has a materially greater interest in the resolution of the conflict. We are unwilling to make these assumptions.29
In order to find the first prong satisfied, we would have to find both that the Ohio statute represents fundamental state policy and that the parties' chosen law would be contrary to this fundamental policy. There is no hard and fast rule to determine when a state policy will be considered "fundamental." The Restatement suggests a few guidelines. For example, courts may consider a policy "fundamental" when a large number of significant contacts are grouped in the forum state as opposed to the chosen state. Restatement (Second) of Conflict of Laws, § 187 comment g (1971). In the present case, we might observe that there is no heavy concentration of significant contacts in Ohio, rather the contacts are fairly evenly divided between New Jersey and Ohio.30
The Restatement also suggests that a statute may embody a "fundamental" state policy if it is "designed to protect a person against the oppressive use of superior bargaining power [as, for example, in a statute] involving the rights of an individual insured as against an insurance company...." Id. We think it important to our decision that the parties to this contract were not of unequal bargaining strength. Their contract was freely negotiated by aggressive and successful business executives, untainted by the suspicion and misgivings characteristic of adhesion contracts. Thus, we are unable to conclude that the Ohio Business Opportunity Plans Act represents a fundamental policy of Ohio.31
Further, even if we were to concede that the Ohio statute represents fundamental public policy, we are unpersuaded that the application of New Jersey law would be contrary to this policy. Both parties agree that New Jersey does not have a statute which is identical to the Ohio Act. One may not determine conclusively from this omission, however, that the application of New Jersey law would be contrary to Ohio policy. Tele-Save acknowledges that there are also common law remedies available under New Jersey law. In its original complaint, Tele-Save alleged claims for breach of contract and fraud. It is not sufficient for Tele-Save to argue nor would we hold that Ohio law should be applied merely because a different result would be reached under New Jersey law. Restatement (Second) of Conflict of Laws, § 187 comment g (1971). In order for the chosen state's law to violate the fundamental policy of Ohio, it must be shown that there are significant differences in the application of the law of the two states. Barnes Group, Inc. v. C & C Products, Inc., 716 F.2d 1023, 1031 n. 19 (4th Cir.1983) (Ohio law regarding restrictive covenants not applied to a state that prohibits such covenants). We find nothing under the facts before us to indicate that application of New Jersey law would be repugnant to or clearly contrary to the public policy of Ohio. Because we find the first prong of the Restatement, section 187(2)(b) analysis to be unsatisfied, we need not address the question of whether Ohio has a materially greater interest than New Jersey in the outcome of this dispute.32
As an alternative argument, Tele-Save asks that we find section 1334.15 of the Act to be a statutory directive regarding Ohio choice-of-law. Tele-Save bases its argument on section 6(1) of the Restatement (Second) of Conflict of Laws which reads: "A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law." Tele-Save contends that if we accept the section 6(1) Restatement argument, we need not engage in the section 187(2)(b) analysis.33
In support of its theory, Tele-Save cites Turner v. Aldens, Inc., 179 N.J. Super. 596, 433 A.2d 439 (1981), in which a New  Jersey court chose to apply the provisions of the New Jersey Retail Installment Sales Act rather than the parties' contractual choice of Illinois law. We think it significant that Turner involved adhesion contracts. The New Jersey court, in holding that failure to apply the statute would violate a fundamental policy of New Jersey, voiced concern that individual consumers had not freely chosen Illinois law to govern their contracts. To the contrary in the present case we have a freely negotiated contract between parties of relatively equal bargaining strength. We are unpersuaded that section 1334.15 of the Ohio Act should constitute a statutory directive on Ohio choice-of-law as to these parties.34
For these reasons we find the Ohio Business Opportunity Plans Act inapplicable to this case. The decision of the district court is affirmed.35
Because I believe that the Ohio Business Opportunity Purchasers Protection Act ("the Act"), Ohio Rev. Code § 1334.01 et seq., is applicable in the present case, I must respectfully dissent.37
The issue presented is whether an out-of-state seller of business opportunity plans may avoid application of the Act by means of a contractual choice-of-law provision. The purpose of the Act is "to regulate the sale of business opportunity plans and [to provide] significant remedies `to those who have been misled by dishonest or negligent franchisors.'" Peltier v. Spaghetti Tree, Inc., 6 Ohio St.3d 194, 451 N.E.2d 1219, 1221 (1983) (quoting Comment, The Business Opportunity Purchasers Protection Act: The Unfulfilled Promise to Ohio Franchisees, 41 Ohio St. L.J. 477, 498 (1980)). The Act requires sellers of business opportunity plans to provide purchasers written disclosure statements, Ohio Rev.Code §§ 1334.02, 1334.06, and prohibits certain practices and representations, Ohio Rev.Code §§ 1334.03, 1334.06. Those who violate the Act may be liable for civil penalties, Ohio Rev.Code § 1334.08, and may be subject to criminal sanctions, Ohio Rev.Code § 1334.99. When a seller violates any provision, the purchaser may rescind the transaction and recover the greater of three times the amount of actual damages or $10,000.00, plus a reasonable attorney's fee. Ohio Rev.Code § 1334.09.38
A federal court sitting in a diversity case must apply the conflict of laws rules prevailing in the state in which the court sits. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941); Colonial Refrigerated Transportation, Inc. v. Worsham, 705 F.2d 821, 825 (6th Cir.1983). This court is not permitted to fashion its own rules and must, whenever possible, reach the identical result the state court would reach in deciding the same issue. See Goodwin v. George Fischer Foundry Systems, Inc., 769 F.2d 708, 711 (11th Cir.1985). Therefore, this court is required, as was the district court, to function as an Ohio court in deciding whether to enforce the contractual choice-of-law provision.39
Under Ohio law, a contractual choice-of-law provision will not be given effect where "application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which ... would be the state of the applicable law in the absence of an effective choice of law by the parties." Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co., 6 Ohio St.3d 436, 438-39, 453 N.E.2d 683, 686 (1983) (quoting and expressly adopting Restatement (Second) of Conflict of Laws § 187(2)(b) (1971)); see also Jarvis v. Ashland Oil, Inc., 17 Ohio St.3d 189, 191, 478 N.E.2d 786, 788-89 (1985). Although Ohio courts accord considerable deference to contractual choice-of-law provisions, the extent to which Ohio courts will allow "deft draftmanship" to override Ohio public policy and bypass legislative judgments is limited. Barnes Group, Inc. v. C & C Products, Inc., 716 F.2d 1023, 1029 (4th Cir.1983) (per curiam). Fulfillment of the parties' expectations is an important consideration in contract law, but "regard must also be had for state interests and  state regulation." Restatement (Second) of Conflicts of Laws § 187 comment g (1971).40
Ohio has a clearly expressed fundamental policy of protecting small, inexperienced purchasers of business opportunity plans from the unfair and misleading practices often utilized by economically superior sellers of business opportunity plans. See Business Incentives Co. v. Sony Corp., 397 F.Supp. 63 (S.D.N.Y.1975) (contractual choice of New York law unenforceable because it contravened New Jersey's statutory policy of protecting small investors from unfair franchise practices); Restatement (Second) of Conflicts of Laws § 187 comment g (1971) ("a fundamental policy may be embodied in a statute ... which is designed to protect a person against the oppressive use of superior bargaining power."). The Act implicitly recognizes that oftentimes individuals with little economic wealth or business experience are lured into purchasing business opportunity plans "by exaggerated profit claims made by sellers who fail to provide full and complete information regarding crucial aspects of the plan." Meaney, Ohio's Business Opportunity Law: A Practical Guide, 11 Ohio N.U.L.Rev. 651, 652 (1984). The fact that the Ohio legislature considered these protections fundamental is evidenced by the fact that Ohio provided criminal sanctions for violations of the Act. See MGM Grand Hotel, Inc. v. Imperial Glass Co., 65 F.R.D. 624, 632 (D.Nev.1974), rev'd on other grounds, 533 F.2d 486 (9th Cir.), cert. denied, 429 U.S. 887, 97 S.Ct. 239, 50 L.Ed.2d 168 (1976).41
Moreover, Ohio has a clearly expressed fundamental policy of prohibiting enforcement of contractual choice-of-law provisions abrogating the protections afforded by the Act. See Industrial Indemnity Insurance Co. v. United States, 757 F.2d 982 (9th Cir.1985) (Idaho expressed a fundamental policy of strict adherence to the statute of limitations period by statutorily prohibiting any condition in a contract that would reduce the period); Forney Industries, Inc. v. Andre, 246 F.Supp. 333 (D.N.D.1965) (North Dakota expressed a fundamental policy against covenants not to compete by virtue of a statute which rendered contracts in restraint of trade void). Ohio Rev.Code § 1334.15 provides that "[a]ny waiver by a purchaser of sections 1334.01 to 1334.15 of the Revised Code is contrary to public policy and is void and unenforceable." Moreover, Ohio Rev.Code § 1334.06(E)(2) provides that "no seller shall ... [i]nclude in any agreement ... any waiver of any rights to which the purchaser is entitled under sections 1334.01 to 1334.15 of the Revised Code...."42
Ohio also has a "materially greater interest" than New Jersey in resolution of this controversy. See Barnes, 716 F.2d at 1030 (Alabama's interest in regulating business relationships within the state is materially greater than Ohio's generalized interest in protecting the interstate contracts of its domiciliary); Stickney v. Smith, 693 F.2d 563, 565 (5th Cir.1982) (Louisiana's interest in protecting persons injured within the  state is materially greater than Michigan's interest in construing the insurance contracts issued by its domiciliary); Business Incentives, 397 F.Supp. at 67 (New Jersey's interest in protecting small businessmen and powerless consumers is materially greater than New York's interest in protecting interstate contract of its domiciliary). Ohio's interests in applying its own law are to maintain its ability to regulate the sale of business opportunity plans within the state and to protect its citizens from dishonest or negligent franchisors. In my view, Ohio courts would hold that these interests materially outweigh any generalized interest New Jersey might have in applying its own law to protect the interstate contracts of its domiciliary.43
Ohio would be the state of applicable law in the absence of an effective choice of law by the parties. Winer Motors, Inc. v. Jaguar Rover Triumph, Inc., 208 N.J.Super. 666, 506 A.2d 817 (1986) (New Jersey legislature intended Franchise Practices Act to govern the relationship between an out-of-state franchisor and a New Jersey franchisee and this intent constitutes a statutory directive regarding choice of law). Ohio has adopted Restatement (Second) of Conflicts of Laws § 188 (1971) to deal with the situation where the parties have not made an effective choice of law. Gries Sports Enterprises, Inc. v. Modell, 15 Ohio St.3d 284, 473 N.E.2d 807, 810 (1984), cert. denied, 473 U.S. 906, 105 S.Ct. 3530, 87 L.Ed.2d 654 (1985). Section 188(1) requires application of the law of the state which "has the most significant relationship to the transaction and the parties under the principles stated in § 6." Section 6(1) of the Restatement provides that "[a] court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law."44
Application of section 6(1) is not limited to those situations where the legislature has expressly directed a court "to apply the local law of one state, rather than the local law of another state, in the decision of a particular issue." Restatement (Second) of Conflicts of Laws § 6 comment b (1971). Section 6(1) requires a court to "give a local statute the range of application intended by the legislature when these intentions can be ascertained and can constitutionally be given effect. If the legislature intended that the statute should be applied to the out-of-state facts involved, the court should so apply it unless constitutional considerations forbid." Id. The Ohio legislature intended to offer Ohio residents the protection of the Act no matter where the seller deals, and this intent constitutes a statutory directive respecting choice of law.45
Even if the choice-of-law provision is not "contrary to a fundamental policy of a state which has a materially greater interest than the chosen state," section 6(1) requires application of Ohio law. "Provided that it is constitutional to do so, the court will apply a local statute in the manner intended by the legislature even when the local law of another state would be applicable under usual choice-of-law principles." Restatement (Second) of Conflicts of Laws § 6 comment b (1971). The Ohio legislature expressly intended the Act to apply to these facts, and this court, while functioning as an Ohio court for purposes of diversity, may not disregard the directions of the Ohio legislature. Restatement (Second) of Conflicts of Laws § 6 comment a (1971).46
Accordingly, I would REVERSE the district court's entry of summary judgment and REMAND for further proceedings.47
 The majority suggests that whether a state's policy is fundamental depends on the number of contacts the state has with the transaction. To the contrary, Restatement (Second) of Conflicts of Laws § 187 comment g (1971), provides only "that the more contacts the transaction has with the chosen state, the stronger the public policy must be to overcome the stipulation." E. Scoles & P. Hay, Conflict of Laws § 18.9, at 648 (1984).48
The majority suggests that Ohio's policy of protecting small investors and prohibiting contractual waivers of rights provided in the Act is not implicated in the present case because Tele-Save and Consumers "were not of unequal bargaining strength." To the contrary, Consumers was one of the largest chains of catalog showroom operations in the United States and Canada, while Tele-Save, having been capitalized with only a $150,000 investment, was seriously undercapitalized. Joint Appendix at 53-57, 87. This gross disproportionality in economic strength is not indicative of equal bargaining power.49
The majority also suggests that Ohio's public policy would not be undermined by requiring Tele-Save to pursue New Jersey's common law fraud remedy. To the contrary, in the absence of a fiduciary relationship, nondisclosure does not constitute fraud under New Jersey law. Nappe v. Anschelewitz, Barr, Ansell & Bonello, 189 N.J.Super. 347, 460 A.2d 161 (1983), aff'd in part and rev'd in part, 97 N.J. 37, 477 A.2d 1224 (N.J.1984).50
 The majority suggests that the Ohio legislature did not intend the Act to apply to a contract between an Ohio purchaser and an out-of-state seller unless the contract is one of adhesion. To the contrary, the Act is expressly applicable to "any claim arising from the sale or lease of a business opportunity plan" in Ohio, Ohio Rev.Code § 1334.10(A), and there is no evidence that the Act was intended to apply only to adhesion contracts.
Superior Court of Massachusetts,
May 5, 2009.
Plaintiff EMC Corporation (EMC) seeks an order enjoining its departing employee, defendant David A. Donatelli (Donatelli), from commencing employment with Hewlett-Packard Company (HP), on the basis that such employment would violate a non-compete covenant which Donatelli signed after commencing employment with EMC.
The Court heard the parties on EMC's motion on Friday, May 1, 2009. Donatelli's scheduled commencement date with HP is Tuesday, May 5. After hearing, the Court concludes that the covenant which Donatelli signed is an enforceable contract, is not unreasonably broad (at least on its face), and serves legitimate business interests of EMC. The Court further concludes that Donatelli's intention to work for HP in California, which has a statutory prohibition on covenants not to compete, does not warrant denial of EMC's request for injunctive relief in the circumstances of this case. Finally, the Court will permit Donatelli, if he wishes, to supplement the record with regard to whether he may be employed by HP in a manner which will not prejudice business interests of EMC which are legitimately protected by the non-compete covenant.
Donatelli began his employment with EMC in Massachusetts in 1987. He has been and is presently a Massachusetts resident, and worked at EMC's headquarters in Hopkinton. His most recent title is EMC Executive Vice President and President, EMC Storage Division. The Storage Division produces hardware and software products enabling the storage of information, and accounts for 80% of EMC's revenue. Donatelli oversaw development of the Storage Division's key products: EMC Symmetrix and CLARiiON families of networked storage systems, EMC Celerra network-attached storage (NAS) systems, and EMC Centera content addressed storage (CAS) systems.
On May 13, 2002, Donatelli signed an EMC “Key Employee Agreement” (Agreement) which contains, inter alia, a covenant not to compete (“non-competition covenant” or “covenant”). The covenant states, at paragraph 1(b):
For the twelve month period following the effective date of your termination, for any reason, from the Company, you agree not to directly or indirectly compete with the Company ... [including] (i) the provision of any services ... as an employee ... to any entity that is developing, producing, marketing, soliciting or selling products or services competitive with products or services being developed, produced, marketed or sold by the Company as of the effective day of your termination.
On Monday, April 27, 2009, Donatelli informed EMC that he was resigning from EMC and that he intended to commence employment with HP on May 5. In a press release dated April 28, HP announced that Donatelli will “serve as executive vice president, Enterprise Servers, Storage and Networking ... His responsibilities will include the Enterprise Storage and Server (ESS) business unit, which had fiscal year 2008 revenues of $19.4 billion.”
Also on April 27, Donatelli commenced an action against EMC in California Superior Court. The complaint seeks to enjoin EMC from “enforcing the non-competition ... provision[ ] of the Key Employee Agreement in California,” on the basis that the provision violates the California Business and Professions Code, § 17200 et seq.
On April 28, EMC commenced this action against Donatelli. The complaint seeks judgment that Donatelli be restrained and enjoined “from working for Hewlett-Packard, for [sic] disclosing or using any of EMC's confidential and proprietary information, from destroying, discarding or altering, directly or indirectly, any EMC Property,” and that he be required to return all “EMC Property.”
On April 30, after hearing, the California Superior Court denied Donatelli's application for temporary restraining order, and scheduled a May 15 hearing on Donatelli's motion for preliminary injunction, and motion to stay this Massachusetts action.
The general principles governing enforceability of non-competition covenants in Massachusetts are well established. As stated in Boulanger v. Dunkin' Donuts, Inc., 442 Mass. 635, 639 (2004):
A covenant not to compete is enforceable only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest. See Marine Contrs. Co. v. Hurley, 365 Mass. 280, 287-88, 289, (1974); All Stainless, Inc. v. Colby, 364 Mass. 773, 778 (1974). Covenants not to compete are valid if they are reasonable in light of the facts in each case. See Marine Contrs. Co. v. Hurley, supra at 287; Saltman v. Smith, 313 Mass. 135, 145 (1943).
There is little doubt that EMC's non-competition covenant is necessary to protect its legitimate business interests in this case, in light of Donatelli's knowledge, by virtue of his position and responsibilities, of EMC's proprietary and trade secret information; Donatelli does not seriously argue to the contrary. Nor does he contest the reasonableness of the covenant's one-year restriction.
Instead, Donatelli argues that EMC's motion for injunctive relief enforcing the non-competition covenant should be denied on several grounds, which the Court addresses below.
Donatelli contends that California law renders the covenant unenforceable because “California's stronger interests require the Court to set aside the noncompete's choice-of-law clause” (Opposition at 4), and “EMC's motion is futile because no California court would enforce the noncompete” ( id. at 7). In any event, he argues, “this Court should stay these proceedings pending the outcome in the first-filed California declaratory action .” Id. at 9.
The Agreement provides, at paragraph 7(h): “You [i.e., Donatelli] agree that the appropriate venue for such action [commenced by EMC to enforce the Agreement] is in the state and/or federal courts located in Massachusetts, and you consent to personal jurisdiction in such courts”; and at 7(j): “This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the doctrine of conflicts of law.”
Relying primarily on Massachusetts federal and California state decisions Donatelli argues that Massachusetts courts will invalidate a choice of law provision “(1) when it conflicts with the fundamental policy of another state, (2) when that state has a materially greater interest than the chosen state in the determination of the particular issue, and (3) when the law of that state would apply in the absence of an effective choice-of-law clause.” Opposition, at 4-5.
In support of his first point, Donatelli asserts that “California famously has a fundamental policy against the enforcement of restrictive covenants, while Massachusetts does not.” Id. at 5. It is true that Section 16,600 of the California Business and Profession Code (Section 16,600) voids any contract “by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind ...” It is also true, as noted above, that Massachusetts common law provides for enforcement of the very same contracts, to the extent that they reasonably protect legitimate business interests of employers. The Court does not agree that California's legislative policy, at least in this case, is somehow more “fundamental” than, and therefore trumps, Massachusetts' common law.
With regard to which state has a “materially greater interest” in resolving this dispute, Donatelli cites Roll Systems, Inc. v. Shupe, No. 97-12689-GAO, 1998 U.S. Dist. LEXIS 3142, at *4-6 (D.Mass. Jan. 22, 1998), a case “with similar facts to this one.” Opposition at 5. While acknowledging that, unlike this case, the employee in Roll Systems had actually been working in California for Roll Systems, a Massachusetts company, Donatelli nevertheless argues that, as in Roll Systems, “any ‘performance’ of the noncompete restriction would be in California. California's strong public policy requires its workers to be free to move around. Thus, California has a greater interest in having its laws govern this dispute than does Massachusetts.” Opposition at 5-6 (emphasis added).
The problem with Donatelli's argument is that, unlike the employee in Roll Systems, he is not, even now, a California resident, and therefore is not yet one of “its workers” whose freedom of movement California has a strong interest in protecting. The distinction is noted in Roll Systems:
... California has a materially greater interest than Massachusetts has in resolving this dispute. Shupe is a California resident working out of California. Since leaving Roll Systems, Shupe has continued to work and live in California. In these circumstances, California has a strong interest in enforcing its fundamental policy regulating attempted limits on the ability of its citizens to change employment without restriction.
Roll Systems, supra, at 7 (emphasis added). Where as here the employee has at all relevant times up to the filing of the complaint lived and worked in Massachusetts, the Court concludes that California's interest in regulating limits on his future activities there does not outweigh Massachusetts' interest in applying Massachusetts law to determine the enforceability of his employment agreement with a Massachusetts company.
Finally, Donatelli argues that California law would apply in the absence of a choice of law provision. As EMC points out, however, “Massachusetts courts will enforce [the parties' choice of law] except where it would result in violation of the fundamental public policy of a state with a materially greater interest in the dispute, and whose law would have applied absent the parties' contractual choice of law.” EMC's Memorandum in Support, at 9, citing Hodas v. Morin, 442 Mass. 544, 550 (2004). Where (1) EMC is based in Massachusetts, (2) Donatelli is a resident of and domiciled in Massachusetts, (3) Donatelli entered the Agreement in Massachusetts, (4) Donatelli has worked for EMC in Massachusetts for 21 years, and has performed under the Agreement for the past seven, and (5) California does not have a materially greater interest in the dispute than does Massachusetts, Donatelli's argument that California law should apply is unavailing.
Donatelli argues that EMC's motion is futile because no California court would enforce an order of this Court enforcing the noncompetition covenant. He cites a BLS decision in Aware, Inc. v. Ramirez-Mireles, 2001 Mass.Super. LEXIS 221, *5, [13 Mass. L. Rptr. 257] in which the court, allowing defendant's motion to dismiss on grounds of forum non conveniens, “doubted the propriety of a Massachusetts court entering a ‘judgment against a California resident, that seems contrary to California public policy, but will have to be enforced in some ancillary proceeding in California.’ “ Opposition at 8, quoting Aware, supra at *5. In Aware, as in Roll Systems, the employee had lived and worked in California, pretermination, for his Massachusetts employer. Those cases therefore presented circumstances in which Massachusetts' interest was not as strong as in this case, for the reasons noted above.
Where Massachusetts has an interest in the employment relationship of Massachusetts employers and employees that is significant, this Court should not deny an otherwise meritorious motion for injunctive relief simply because another state may not enforce the injunction should the Massachusetts employee move to that state. Equitable considerations come into play here. It is one thing for a person who has lived and worked in California to wish to continue to live and work in California, only with a different employer. It is quite another for a Massachusetts resident who has agreed to a non-competition covenant, enforceable in Massachusetts, to choose for his new residence and place of employment the one state where the likelihood of his defeating his non-competition covenant may be the greatest. As Donatelli's attorney argued at the hearing, “he can escape to California,” and by doing so can escape the obligations of the covenant. While California's courts may ultimately agree with him, the argument underscores the inferiority of Donatelli's fairness claim compared with those asserted by California residents in Aware, Roll Systems, and similar cases which he cites.
Donatelli's claim is further diminished when the Court examines the reasonable expectations of the parties at the time the non-competition covenant was executed. A Massachusetts employer who obtains a non-competition covenant from an employee who at the time lives and works in California is on notice that, should that employee later resign and seek employment with a competitor, the California court will likely strike the covenant. Where the employee lives and works in Massachusetts, however, there is much less reason for the employer, at the time the employee executes the covenant, to expect that it will be unenforceable. Similarly, the Massachusetts employee, unlike his California counterpart, upon signing the covenant has reason to expect that it will be enforced.
Donatelli argues that the Court should stay this case to avoid “piecemeal litigation” and the “real possibility that the two courts might issue contradictory preliminary injunctions.” Opposition, at 9-10. He relies on a summary “Memorandum, Preliminary Injunction and Order Staying Further Proceedings” entered in E Ink Corp. v. Drzaic, SUCV No. 01-1617-BLS (April 19, 2001) (van Gestel, J.).
It goes without saying that different cases in the Superior Court presenting similar issues may be decided differently, depending on the circumstances particular to each case. As the Court has concluded above, the circumstances of this case do not lead to the conclusion that the interest of California in this dispute is so predominant that this Court should stay its decision.
Moreover, the California Supreme Court has acknowledged the interests of foreign states in such disputes, and rejected the argument that a first-filed case in California should operate to stay a later-filed case in the enforcing state. In Advanced Bionics Corporation v. Medtronic, 29 Cal.4th 697 (2002), the employee had resigned from Medtronic and gone to California to work for Advanced Bionics. The latter sued in California, and Medtronics sued in Minnesota. The California Supreme Court observed that, “even assuming a California court might reasonably conclude that the contractual provision at issue here is void in this state, this policy interest does not, under these facts, justify issuance of a TRO against the parties in the Minnesota court proceedings. A parallel action in a different state presents sovereignty concerns that compel California courts to use judicial restraint ...” Id. at 706-07. The court goes on to hold that the first-filed rule “was never meant to apply where the two courts involved are not courts of the same sovereignty.” Id. at 707.
Donatelli's second basis for opposing injunctive relief is that the non-competition covenant is not enforceable under Massachusetts law, and therefore that EMC has failed to demonstrate a sufficient likelihood of success on the merits. Specifically, he argues that (1) the covenant was not supported by consideration, and (2) that the covenant is broader than necessary to protect EMC's interests.
As Donatelli points out, he signed the agreement not when he was hired by EMC in 1987, but in 2002, after fifteen years of employment. Relying on IKON Office Solutions, Inc. v. Belanger, 59 F.Sup.2d 125, 128 (D.Mass.1999), and several Superior Court decisions, he argues that “an at will employee who receives a noncompete after the start of the employment relationship must get something more than just continued employment for the noncompete to be enforceable.” Opposition at 11-12.
It is fair to observe that the state of Massachusetts law is not crystal clear with regard to whether continued employment alone provides sufficient consideration for a non-competition covenant. However, to the extent that IKON stands for the proposition that, on the facts of that case, mere continuation of defendant's existing employment was not sufficient, the Court concludes that IKON does not reflect current Massachusetts law. See Economy Grocery Stores Corp. v. McMenamy, 290 Mass. 549, 552 (1935); Sherman v. Pfefferkorn, 241 Mass. 468, 473 (1922); Wilkinson v.. QCC, Inc., 53 Mass.App.Ct. 1109 (2001) (unpublished decision) (“To the extent new consideration was required [to support a non-competition agreement ‘imposed on’ plaintiff when he was already employed], continued employment was the consideration”). Id. at *1.
As this court observed in Lunt v. Campbell, 2007 WL 2935864 (Mass.Superior 2007) (Fabricant, J.) [23 Mass. L. Rptr. 145], cases such as IKON, which “express[es] doubt” about the adequacy of continued employment as sole consideration for a post-employment non-competition agreement, highlight circumstances which “weigh in the Court's evaluation of equitable factors in deciding whether to enforce by means of the grant of an injunction.” They do not abolish the doctrine that continued employment alone may suffice to support such covenants.
Moreover, there is other evidence of consideration in this case. The cover page of the Agreement, signed by EMC's president and CEO, states that “[i]n consideration of your employment by EMC and in recognition of the fact that as an employee of EMC you have access to confidential information, I ask that you please review and sign” the Agreement. The second page of the Agreement states that, “in consideration for being provided with access to certain trade secrets and/or confidential and proprietary information in conjunction with your employment with the company, you agree as follows: ...”
Finally, paragraph 7(j) of the Agreement states: “This Agreement is executed under seal.” In Marine Contractors Co. v. Hurley, 365 Mass. 280, 284-85 (1974), the court concluded that a promise not to compete, signed under seal, was enforceable. The court noted that “[t]he rule that consideration is unnecessary when an instrument is under seal has been applied in both actions at law and suits in equity.” Id. at 285. The court also concluded that, apart from the seal, the acceleration of a benefit for the employee provided sufficient consideration.
While the Supreme Judicial Court has since abandoned the doctrine that a seal imports consideration sufficient, without more, with regard to option contracts and contracts executed on behalf of an undisclosed principal, see Knott v. Racicot, 442 Mass. 314, 319-20 (2004), it has not yet done so with regard to non-competition agreements. Indeed, in Knott, the court cites Marine Contractors as an example of cases involving contracts as to which, “over time, simply the words ‘under seal’ or a similar phrase appearing in a mass-produced, form contract became sufficient to invest that document with the privileged status of a sealed instrument.” Id.
Although Massachusetts law regarding the consideration required to support covenants not to compete is not free from doubt, the Court concludes from the foregoing discussion that, in the circumstances of this case, EMC has demonstrated the necessary likelihood of success on the merits of its claim that the non-competition covenant is supported by adequate consideration.
Donatelli contends that the covenant is broader than necessary to protect EMC's legitimate business interests, because “EMC seeks to prevent Donatelli from working at HP at all even though only 20 percent of his job overlaps with his previous EMC job duties.” Opposition at 14. Specifically, he argues that, “[w]hile it is true that EMC and HP compete in the storage sector, storage-related responsibilities will make up only about 20 percent of Donatelli's position at HP, the majority of his responsibilities will relate to servers and networking gear-two areas EMC does not occupy.” Id., at 15.
At the hearing, EMC argued that Donatelli's argument fails because it is the very integration of EMC's storage products with servers and networking equipment that gives EMC's products a competitive edge; in counsel's words, “it's all linked.” The Court's understanding of those facts, let alone the relative merits of the parties' arguments, is at this stage rudimentary at best. It is beyond dispute, however, that a non-competition covenant must be no broader than necessary to protect an employer's legitimate business interests. See Boulanger v. Dunkin' Donuts, Inc., supra, 442 Mass. at 639.
Accordingly, if Donatelli seeks to do so, the Court will permit the parties to develop the record with regard to the following question: of the services that Donatelli would, if permitted, provide as an employee of HP, which constitute services in respect of “products or services competitive with products or services being developed, produced, marketed or sold by” EMC (Agreement, paragraph 1(b)(i)), and which do not?
For the reasons stated above, the Court concludes that EMC has demonstrated a sufficient likelihood of success on the merits of its claim seeking to enforce the non-competition covenant agreed to by defendant David A. Donatelli when he signed the EMC Key Employee Agreement; that the balance of harms favors EMC; and that the relief sought is not against public policy. Accordingly, the Court enters the following preliminary injunction:
Defendant Donatelti is RESTRAINED AND ENJOINED from commencing employment at Hewlett-Packard Company. Donatelli may move to modify this order upon a showing, described in Part II.B. above, that the services which he would provide to Hewlett-Packard do not overlap with products or services being developed, produced, marketed or sold by EMC.
It is further ORDERED that counsel shall schedule and conduct limited written and deposition discovery regarding:
1. the individuals at Hewlett-Packard with whom Donatelli communicated in connection with the possibility of employment at Hewlett-Packard;
2. the responsibilities Donatelli presently understands he would have in connection with his anticipated employment at Hewlett-Packard;
3. documents in Donatelli's possession, custody or control concerning his anticipated employment at Hewlett-Packard, including but not limited to any employment agreement or written offer of employment, including any drafts thereof, and any response thereto or draft of any such response;
4. (at Donatelli's option) additional discovery relating to the issue set out in Part II.B. above.
 The parties have briefed and argued the dispute on the basis of Donatelli's impending employment with HP; they have not focused on any threat by Donatelli to take confidential information or fail to return “EMC Property.”
 Nor does Roll Systems support Donatelli's argument that the only relevant “performance” is the employee's post-termination observance of the noncompetition covenant, which in this case would be in California: “Massachusetts also has a general interest in protecting the legitimate interests of its businesses, like Roll Systems, located here. However, the fact that Shupe's contract was not performed in Massachusetts substantially decreases the Commonwealth's interest in having its laws govern this dispute.” Roll Systems, supra, at 7 n.2. The court apparently considered the place of performance of the entire employment agreement, not just the post-employment restrictions. In that case, both the pre- and post-termination performance were in California. Here, by contrast, Donatelli performed his employment contract with EMC prior to his resignation (including his agreement not to compete while employed by EMC, and to protect EMC's confidential information) substantially, if not entirely, in Massachusetts.
 See Oxford Global Resources, Inc. v. Guerriero, No. 03-12078-DPW, 2003 U.S.Dist., 2003 WL 23112398, at *6 (D.Mass. Dec. 30, 2003) (“... courts generally find it unfair to apply the law of the non-enforcing state and thereby allow the employee to escape the obligations of the contract by, in essence, fleeing the jurisdiction”).
 See Oxford Global Resources, Inc. v. Guerriero, supra, at *6 (“Courts endeavor to protect ‘justified expectations' formed at the time of contract formation. Neither an employer nor an employee examining an employment agreement could justifiably expect it to be governed by the law of a state that has no relation whatsoever other than the employee will someday happen to be in it when he breaches the contract. See Ferrofluidics [ Corp. v. Advanced Vacuum Components, Inc., 968 F.2d 1463,] at 1467-68 [ (1st Cir.1992) ]. Here, neither Oxford [the Massachusetts-based plaintiff] nor any defendant [each of whom worked for Oxford in Massachusetts] could reasonably have anticipated that Texas law would have any relevance to the employment agreements when they were executed, or indeed at any time during defendants' employment”).
 One apparent difference here-while not necessarily determinative-is that in E Ink the employee, Drzaic, was a “former Massachusetts-based employee who had moved to California to work for a competing California-based company.” Opposition at 9. The record in this case reflects that Donatelli is still a Massachusetts resident.
Court of Appeals of Georgia.
 Mayfield, Commander & Pound, William S. Mayfield, Constance E. Rodts, Atlanta, for appellant.
Morris, Manning & Martin, John F. Manning, Donald A. Loft, Ross A. Albert, Atlanta, for appellees.
In the wake of their failed joint venture concerning a commercial property in Gwinnett County, CS-Lakeview at Gwinnett, Inc. (CS-Lakeview), and Simon Property Group, Inc., and its related entities (Simon) entered into a settlement agreement under which CS-Lakeview gained a right of first refusal should Simon obtain a third-party offer as to the Gwinnett property. When such an offer materialized, however, the parties differed as to the procedures to follow, and CS-Lakeview sued Simon and others for breach of contract and other claims. The trial court granted summary judgment to Simon on the ground that CS-Lakeview's right of first refusal was invalid under Delaware's rule against perpetuities, but allowed CS-Lakeview's unjust enrichment claim to go forward. Both parties now appeal. We conclude that none of CS-Lakeview's claims are viable. We therefore affirm in Case No. A06A1841 and reverse in Case No. A06A1842.
The relevant facts are not in dispute. In 1985, CS-Lakeview and the Simon Property Group, both of which are Delaware corporations, began a joint venture to develop 133 acres of land in Gwinnett County. Disputes arose, and Simon sued CS-Lakeview in Delaware Chancery Court in 1994. In the settlement agreement reached late the following year, Simon received the Gwinnett property, while CS-Lakeview retained a right of first refusal under which it could match any "bona fide" offer received "at any time after November 30, 1995." Among other things, the settlement agreement provided that the parties would "take all additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of [the] Agreement" and that it was "subject to and construed in accordance with the laws of the state of Delaware."
In May 2000, Simon gave CS-Lakeview notice that Retail Development Partners (RDP) had made a "bona fide" offer of $5.5 million for the Gwinnett property. When CS-Lakeview asked for additional information, however, Simon reported that it had not yet received a written offer on the property. To avoid litigation over CS-Lakeview's right of first refusal, Simon proposed an option agreement based on RDP's tentative price of $5.5 million. The parties negotiated a license under which CS-Lakeview would inspect the property to determine its prospects for development,  but failed to reach agreement on the remaining terms of the option agreement. On October 6, 2000, CS-Lakeview offered $3.85 million for the Gwinnett property. Soon afterward, Simon rejected this offer, although CS-Lakeview objected that its right had been ignored. In June 2001, Simon sold the Gwinnett property to RDP for the same $5.5 million price it had quoted to CS-Lakeview the previous October.
On March 1, 2002, CS-Lakeview filed a breach of contract action against Simon and associated entities. CS-Lakeview later added Chicago Title Insurance Company (CTIC) as a defendant, alleging tortious interference with contract, fraudulent conveyance, civil conspiracy and other claims. CS-Lakeview also sued RDP in federal court. The federal district court granted summary judgment to RDP on grounds including that the right of first refusal was void under Delaware's rule against perpetuities. After the Eleventh Circuit affirmed on other grounds, the trial court in this case revisited the choice-of-law issue on Simon's motion for summary judgment and also held that CS-Lakeview's right of first refusal was invalid because it violated Delaware's rule against perpetuities. The trial court denied Simon's motion as to CS-Lakeview's unjust enrichment claim, however.
1. CS-Lakeview first argues that the trial court erred when it granted summary judgment to Simon on its breach of contract claim. We disagree.
This case is governed by well-established conflict-of-law principles. Under OCGA § 11-1-105(1), "when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties." "Absent a contrary public policy, this court will normally enforce a contractual choice of law clause." As we have previously explained:
[A] contract should not be held unenforceable as being in contravention of public policy except in cases free from substantial doubt where the prejudice to the public interest clearly appears. Enforcement of a contract or a contract provision which is valid by the law governing the contract will not be denied on the ground of public policy, unless a strong case for such action is presented; mere dissimilarity of law is not sufficient for application of the public policy doctrine.
Applying these principles to this case, it is plain that the settlement agreement at issue here bears a "reasonable relation" to the state of Delaware and its laws. CS-Lakeview and Simon Property Group are both Delaware corporations, the settlement agreement ended a lawsuit filed in Delaware, and the parties chose to construe that agreement under Delaware law. As the Supreme Court of Georgia noted long ago as it enforced a note executed in Georgia but payable elsewhere:
To construe this note and mortgage as we have done works injustice to no one, but puts the parties where they manifestly intended to put themselves. . . . The contract being under our laws perfectly legal, [the defendant] cannot and ought not to expect the courts of this State to release him from his solemn and deliberate undertakings.
 Despite its own negotiated choice of Delaware law, CS-Lakeview argues that its right of first refusal is governed by and valid under Georgia law. Specifically, it asserts that the right, though a future interest in property, is exempt from Georgia's version of the Uniform Statutory Rule against Perpetuities, which "shall not apply to . . . [a] nonvested property interest . . . arising out of a nondonative transfer." A contractual right of first refusal is neither a property interest nor a "nonvested" version of the same, however. Instead, a right of first refusal is a personal and contractual right under Georgia law, and does not run with the land as to which the right is given.
It is true that Delaware law goes further than Georgia's in its pursuit of a policy favoring the alienability of land, as when Delaware disallows a right of first refusal with an unlimited duration. But this difference does not necessarily signify that such a right violates Georgia public policy. In Shiver v. Benton, for example, a co-tenant filed suit to enjoin a sale of property as in violation of a first refusal agreement without any explicit time limit. Our Supreme Court held that when a right of first refusal "is not tied to a fixed price method or some method of pricing which may not reflect true market value, but is conditioned upon meeting a sale price which the seller is willing to accept, [such an a]greement encourages the development of [a] property to its fullest potential." Since the right of first refusal at issue was "compatible with the policies of commerce and utilization of land," the Shiver court concluded that the right neither violated Georgia's rule against perpetuities nor acted as an illegal restraint on alienation.
Like the provision at issue in Shiver, CS-Lakeview's bargained-for right of first refusal allowed it to participate in the open market for the Gwinnett property by giving it a chance to buy at a price reached in that market. Georgia public policy does not bar such provisions. But we respect the parties' selection of Delaware law and conclude that Delaware law voids that right.
2. CS-Lakeview also contends that if its right of first refusal is invalid, the trial court erred in failing (a) to reform the settlement agreement so as to remedy the parties' mutual mistake in choosing Delaware law, which invalidates the right, in favor of Georgia law, which authorizes the right; or (b) to require Simon to execute a document agreeing to apply Georgia law. There is nothing in the record, however, to contradict the conclusion that the parties intended the right of first refusal to be of unlimited duration. As in Thomas v. Murrow, "[t]he question is whether or not the manner in which the parties reflected [their] intention"—here, the settlement provision containing the right of first refusal—"violates the rule against perpetuities."
Division 1 holds that the settlement provision does indeed violate Delaware's version of the rule. OCGA § 23-2-27 provides that "where the facts are all known and there is no misplaced confidence and no artifice, deception, or fraudulent practice is used . . ., [a  party's mere ignorance of the law] shall not authorize the intervention of equity." As Georgia courts have often held, then, the trial court did not err when it denied CS-Lakeview equitable relief for its mere ignorance of applicable Delaware law.
3. Finally, CS-Lakeview argues that the trial court erred when it granted summary judgment to CTIC concerning CS-Lakeview's claims for tortious interference and other wrongs. We disagree.
A plaintiff asserting tortious interference with a contractual relationship must show that the defendant "(1) acted improperly and without privilege; (2) acted purposely and with malice with the intent to injure; (3) induced a third party or parties not to enter into or continue a business relationship with the plaintiff; and (4) caused the plaintiff financial injury."
The record shows that as a result of RDP's concerns about CS-Lakeview's right of first refusal, and in exchange for an agreement to indemnify CTIC against "any claims arising out of the [right of first refusal,]" Simon obtained title insurance from CTIC. There is nothing in the record, however, to support a finding that CTIC committed any wrongful act, including the inducement of Simon to breach CS-Lakeview's right of first refusal. By November 2000, Simon had decided to sell the Gwinnett property to RDP, whereas CTIC did not agree to issue its title insurance policy until June 2001. Like the trial court, the federal district court, and the Eleventh Circuit before us, we conclude that because CTIC could not have induced Simon's alleged breach, CS-Lakeview's claim for tortious interference, as well as its claims for civil conspiracy, punitive damages and fees arising from the same transaction, must therefore fail.
4. In the companion case, Simon cross-appeals from the trial court's denial of its summary judgment motion as to CS-Lakeview's unjust enrichment claim. The trial court held that because CS-Lakeview likely would not have agreed to the settlement agreement without the inclusion of its right of first refusal, a question of fact remained as to whether the invalidation of that right would unjustly enrich Simon. Simon now reasserts arguments made below that CS-Lakeview actually received its bargained-for right and that its unjust enrichment claim is time-barred.
Here, only one part of the settlement agreement has been held invalid, and the agreement contains a severability clause asserting that "[i]f any part or provision of this agreement should be held void or invalid, the remaining provisions shall remain in full force and effect." "A severability clause indicates the intent of the parties where the remainder of the contract can exist without the void portion." The law of unjust enrichment applies, moreover, only when there is no express contract between the parties.
We have held in Division 2 above that CS-Lakeview cannot turn to equity to reform the settlement agreement. It is likewise true, then, that it cannot obtain equitable compensation for any alleged unjust enrichment arising from the invalidation of a bargained-for term in that valid contract when it contains a severability clause. Finally,  even if the law of unjust enrichment were available to CS-Lakeview, its own complaint shows that it received the right it bargained for when Simon informed it of RDP's "bona fide" offer of $5.5 million for the Gwinnett property. For these reasons, we reverse the trial court's denial of Simon's motion for summary judgment on CS-Lakeview's unjust enrichment claim, and need not reach Simon's contention that this claim is time-barred.
Judgment affirmed in Case No. A06A1841 and reversed in Case No. A06A1842.
 One of CS-Lakeview's business associates testified that no larger offer was made because the entity was in the "embarrassing situation" of not being able to obtain the larger amount.
 See also Lafitte v. Lawton, 25 Ga. 305, 308 (1858) (construing marriage settlement entered into in South Carolina concerning land in Georgia under South Carolina law); Daniel F. Hinkel, Pindar's Georgia Real Estate Law and Procedure, § 1-4 (6th ed.2004), p. 10 ("resort may be had to the law of other states in determining the intentions of the parties to contracts who resided in other states at the time of execution, even though so doing may incidentally affect title to realty in Georgia") (footnotes omitted).
 (Citations omitted.) Carr v. Kupfer, 250 Ga. 106, 107(1), 296 S.E.2d 560 (1982), citing New England Mtg. Security Co. v. McLaughlin, 87 Ga. 1, 13 S.E. 81 (1891).
 (Citations and punctuation omitted; emphasis supplied.) Nationwide Gen. Ins. Co. v. Parnham, 182 Ga.App. 823, 825(4), 357 S.E.2d 139 (1987).
 New England Mtg. Security Co., supra at 5-6, 13 S.E. 81.
 OCGA § 44-6-204(1).
 See Ricketson v. Bankers First Sav. Bank, 233 Ga.App. 11, 13-14(1), 503 S.E.2d 297 (1998); Hasty v. Health Svc. Centers, 258 Ga. 625, 373 S.E.2d 356 (1988).
 See Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1384-1385(III) (Del.1991).
 251 Ga. 284, 304 S.E.2d 903 (1983).
 Id. at 286(1), 304 S.E.2d 903.
 Id. at 287(1), 304 S.E.2d 903.
 See Stuart Kingston, supra (right of first refusal with unlimited duration violates Delaware's rule against perpetuities); see also Manderson & Assoc. v. Gore, 193 Ga.App. 723, 725(1), 389 S.E.2d 251 (1989) (honoring contract's choice of Alabama law concerning employment and stock agreements); Nationwide Gen., supra at 825-826(4), 357 S.E.2d 139 (honoring contract's choice of Texas law concerning claim under Texas insurance policy); compare Nasco, Inc. v. Gimbert, 239 Ga. 675, 676(2), 238 S.E.2d 368 (1977) (because validity of covenants not to disclose was a matter of Georgia public policy, trial court correctly disregarded contract's choice of Tennessee law).
 245 Ga. 38, 262 S.E.2d 802 (1980).
 Id. at 39(2), 262 S.E.2d 802.
 Id.; see also Robbins v. Nat. Bank of Ga., 241 Ga. 538, 543-544(2), 246 S.E.2d 660 (1978).
 (Citation and punctuation omitted.) Atlanta Multispecialty Surgical Assoc. v. DeKalb Med. Center, 273 Ga.App. 355, 356(2), 615 S.E.2d 166 (2005).
 See id. (when one element of tortious interference fails, the entire claim fails); Nelson & Hill, P.A. v. Wood, 245 Ga.App. 60, 67-68(3), 537 S.E.2d 670 (2000) (granting summary judgment on punitive damages dependent on claim for breach of fiduciary duty).
 (Citations omitted.) Capricorn Systems v. Pednekar, 248 Ga.App. 424, 428-429(2)(d), 546 S.E.2d 554 (2001); see also OCGA § 13-1-8.
 See Cox v. Athens Regional Med. Center, 279 Ga.App. 586, 593(3), 631 S.E.2d 792 (2006).
 See id. (affirming dismissal of unjust enrichment claim when parties entered into valid contract); Capricorn, supra at 426-429(2)(a)-(d), 546 S.E.2d 554 (invalidating restrictive covenant, but enforcing employment contract containing severability clause); compare Imerman v. London, 255 Ga.App. 140, 564 S.E.2d 544 (2002) (refusing to find global settlement agreement severable without noting whether agreement had severability clause).
Court of Appeals of California, Fourth District, Division One.
 Majors & Fox, Frank J. Fox, Lawrence J. Salisbury, Steven T. Wlodek; Law Office of Mary A. Lehman and Mary A. Lehman for Plaintiff and Appellant.
Pillsbury, Winthrop, Shaw & Pittman, Richard M. Segal, Connie J. Wolfe; Diamond, McCarthy, Taylor, Finley & Lee, William T. Reid IV, Michael S. Truesdale and Lisa S. Tsai for Defendants and Respondents.
Edmund G. Brown, Jr., Attorney General, Tom Greene, Chief Assistant Attorney General, Albert Norman Shelden, Ronald A. Reiter, Kathrin Sears and Michele R. Van Gelderen, Deputy Attorneys General, as Amicus Curiae.
The principal defendant in this class action lawsuit, respondent Omni Loan Company, Ltd. (Omni), a Nevada corporation, engaged in consumer lending in California. Although Omni's activities would otherwise be subject to the California Finance Lenders Law (Finance Lenders Law) (Fin. Code, § 22000 et seq.), under choice-of-law provisions in Omni's loan agreements borrowers agreed Omni's loans would be governed by the law of Nevada. We conclude this choice of Nevada law is not enforceable.
In general, California courts will enforce a contractual choice of law if the state whose law was chosen has an interest in the parties' controversy. However, if application of the chosen law conflicts with a fundamental policy of this state, our courts must consider the impact application of the law will have on California's interests. If California's interests are materially greater than the interests of the state whose law was chosen by the parties, California will apply its law.
As we explain more fully below, here because application of Nevada law would conflict with fundamental California policy as manifested in the  Finance Lenders Law and because California has a greater interest in the parties' transaction than Nevada, the parties' choice of law is not enforceable.
Omni is a Nevada corporation with its principal place of business in Las Vegas, Nevada. Omni is in the business of providing consumer loans to members of the military. Typically, Omni's loans are between $900 and $1,800, have repayment schedules of between nine and 18 months, and are funded by Omni on the same day Omni receives a borrower's application. In California, Omni's borrowers are nonresident members of the military, most of whom agree to repay their loans by way of deductions from their military paychecks. Omni's borrowers must also provide Omni with a security interest in personal property.
Commencing in July 1997 Omni attempted to obtain permission from the Commissioner of Corporations (the commissioner) to make loans in California to nonresident members of the military without complying with the requirements of the Finance Lenders Law. In seeking permission to make such loans, Omni relied on an early ruling the commissioner had provided to one of Omni's competitors, Pioneer Military Lending, Inc. (Pioneer). In 1996 Pioneer contacted the commissioner and described a loan program restricted to nonresident military personnel Pioneer planned to establish in California. Pioneer asked the commissioner for a ruling that its loan program was not subject to the Finance Lenders Law, and the commissioner provided it with such a ruling. In a letter to Pioneer, the commissioner stated "it is difficult to discern what the interest is of the State of California so as to require licensure of Pioneer under [Finance Lenders Law]." Thus, the commissioner advised Pioneer its loan program was not finance lending within the meaning of the Finance Lenders Law.
The commissioner declined to provide Omni with a ruling permitting it to operate its loan programs in California without a Finance Lenders Law license. In declining to grant Omni's request, the commissioner stated: "Omni's proposed lending activities are similar to Pioneer's, in that both lenders have represented to the Department that they will only be making loans to military personnel who are not residents of California. However, Omni appears to propose a greater business presence in California than Pioneer proposed to the Department. Pioneer represented to the Department that its loan paperwork would not be processed in California, and that the loans would be funded out-of-state. Thus, Pioneer represented that it would  be making the loans from out-of-state to nonresidents stationed in California, and that its business activities within California would be minimal. Omni appears to propose a main California office to perform all functions related to making loans, and to further propose contracting with one to two independent contractors to facilitate the lending through the California main office. Omni is proposing to engage in more lending activities within the state of California than Pioneer, and is therefore more likely to be engaged in the business of a finance lender in California than Pioneer. In short, Omni has not chosen to structure its California lending activities in a manner identical to the Pioneer structure set forth in [the Pioneer letter]."
Omni challenged the commissioner's conclusion its business plan was materially different from Pioneer's. However, the commissioner declined to alter the Department of Corporations' determination: "As noted in [our earlier letter to you], the Department is unwilling to expand the reasoning in [the Pioneer letter] to include expanded business activity in California merely because the lending is to non-resident military personnel. Under the [Finance Lenders Law], California has a number of state interests in licensing finance lending activities beyond the protection of its citizens; therefore, any expansion of the business presence and business activities in California related to loans to non-resident military personnel could impact the state's interests and thus the Department would require licensure under the [Finance Lenders Law]."
Notwithstanding the commissioner's refusal to provide Omni with a ruling permitting it to operate in California without a license, in 2000 Omni opened a loan office in Oceanside, and in 2002 it opened another office in San Diego. In addition to the loan offices, Omni developed a retail partners program with California retailers by which Omni financed retail purchases by nonresident members of the military. Although Omni restricted lending from its California offices to nonresident members of the military, when California members of the military came into one of the Omni's offices, the California residents were directed to a computer terminal in the office and advised to go online and obtain financing through Omni's online affiliate, Militaryloans.com.
Plaintiff and appellant Joshua W. Brack was a nonresident member of the military stationed at Camp Pendleton. Brack initially applied electronically for a loan from Omni but was directed to complete his loan application at Omni's Oceanside office. Brack was not advised until he was presented with the loan agreement the interest rate would be 34.89 percent per annum. The loan was secured by Brack's personal property and included a $104.63 charge for property insurance and a prepaid finance charge. Like all of Omni's loans, Brack's loan agreement contained a choice-of-law provision, which stated: "You agree that this loan contract is subject to Nevada State law." Brack repaid his loan in October 2002.
 In December 2003 Brack filed a class action lawsuit against Omni. Brack's principal allegation was that Omni's practices violated borrower's rights under the Finance Lenders Law. Brack alleged Omni's violations of the Finance Lenders Law gave rise to claims under the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) and the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) as well as under the Finance Lenders Law itself. Among other allegations, Brack alleged Omni was engaged in the business of a finance lender without obtaining a license from the commissioner and failed to prominently display in its offices a full and accurate schedule of its interest rate and other charges.
Omni answered the complaint and denied its material allegations. In addition, Omni asserted as an affirmative defense its contention that Brack's loan and all the loans of the putative class members contained a choice-of-law provision under which the borrowers agreed the loan would be governed by the law of Nevada. Omni also asserted Brack's claims were barred by the commerce clause of the United States Constitution.
Omni stipulated to class certification. The trial court then ordered trial of Omni's choice of law and commerce clause defenses be bifurcated from trial of Brack's affirmative claims. Omni's defenses were tried first by the court.
The trial court found Nevada had a substantial relationship to the loan agreements because Omni Loan Company, Ltd., was incorporated in Nevada and the loans were approved in Nevada. In its principal finding, the court determined California had no fundamental interest in the loan transactions which would require that its laws be applied in place of the law selected under the terms of the loan agreements. In reaching this conclusion, the trial court considered three circumstances. First, it looked to the fact that the department had permitted Pioneer to operate in California without a license and in many respects OMNI's activities were similar to what the department had authorized in its Pioneer letter. Secondly, the trial court found that, in any event, Omni's licensing status was strictly a regulatory matter and not a matter to be considered with respect to the enforceability of the choice-of-law provisions of Omni's loan agreements. Finally, aside from the requirement that finance lenders doing business here obtain a California license, the trial court found that the only difference between California and Nevada law which Brack established at trial was California's requirement that lenders post signs fully and accurately setting forth loan charges and the method of computing charges.
Although the trial court found California did not have a fundamental interest in applying its law, the trial court nonetheless found that because the loan agreements were made in California by consumers located here,  California had a materially greater interest in the loan transactions than Nevada. In light of California's interest in the transactions, the trial court rejected Omni's commerce clause defense. The trial court entered judgment in favor of Omni.
Shortly after the judgment was entered, the commissioner rescinded the Pioneer letter. In its rescission letter, the commissioner set forth a number of interests it believed California has in applying its laws to transactions involving nonresident members of the military. By its terms, the rescission letter had no impact on Pioneer's prior business practices in California. In light of the rescission, Brack moved to set aside the judgment on the grounds the trial court could no longer rely on the Pioneer letter. The trial court denied Brack's motion.
Brack filed a timely notice of appeal.
The interpretation of a choice-of-law provision on undisputed facts presents a purely legal question and is reviewed de novo. (Hambrecht & Quist Venture Partners v. American Medical Internat., Inc. (1995) 38 Cal.App.4th 1532, 1539, fn. 4 [46 Cal.Rptr.2d 33]; American Home Assurance Co. v. Hagadorn (1996) 48 Cal.App.4th 1898, 1907, fn. 6 [56 Cal.Rptr.2d 536].) Moreover, whether, on undisputed facts, the contractual choice-of-law provision supplants the law which would otherwise apply is also a question of law reviewed de novo. (See Hughes Electronics Corp. v. Citibank Delaware (2004) 120 Cal.App.4th 251, 257 [15 Cal.Rptr.3d 244].)
On the other hand, the trial court's resolution of disputed factual matters is subject to review under the substantial evidence standard. (Integral Development Corp. v. Weissenbach (2002) 99 Cal.App.4th 576, 585 [122 Cal.Rptr.2d 24].) Under this familiar standard, evidence must be reviewed in the light most favorable to the prevailing party, giving the benefit of any reasonable inferences and resolving all conflicts in favor of the trial court's finding. (SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 461-462 [17 Cal.Rptr.3d 96].)
(1) The parties largely agree the choice-of-law issue confronting us is governed by the holdings in Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, 464-469 [11 Cal.Rptr.2d 330, 834 P.2d 1148] (Nedlloyd), and Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 914-919 [103 Cal.Rptr.2d 320, 15 P.3d 1071] (Washington Mutual). In Nedlloyd a Hong Kong shipping company entered into a contract with three Dutch shipping companies. The contract contained a choice-of-law provision which required the contract be governed by Hong Kong law. When the Hong Kong company sued the other companies, it argued that notwithstanding the choice-of-law provision, its claims for breach of the covenant of good faith and fair dealing and breach of fiduciary duty should be governed by California law. In rejecting the Hong Kong companies' contention and finding the choice-of-law provision enforceable, the court held that in determining the enforceability of the contractual choice-of-law provisions, "California courts shall apply the principles set forth in Restatement section 187, which reflects a strong policy favoring enforcement of such provisions.
"More specifically, Restatement section 187, subdivision (2) sets forth the following standards: `The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either [¶] (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice, or [¶] (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.'
(2) "Briefly restated, the proper approach under Restatement section 187, subdivision (2) is for the court first to determine either: (1) whether the chosen state has a substantial relationship to the parties or their transaction, or (2) whether there is any other reasonable basis for the parties' choice of law. If neither of these tests is met, that is the end of the inquiry, and the court need not enforce the parties' choice of law. If, however, either test is met, the court must next determine whether the chosen state's law is contrary to a fundamental policy of California. If there is no such conflict, the court shall  enforce the parties' choice of law. If, however, there is a fundamental conflict with California law, the court must then determine whether California has a `materially greater interest than the chosen state in the determination of the particular issue....' (Rest., § 187, subd. (2).) If California has a materially greater interest than the chosen state, the choice of law shall not be enforced, for the obvious reason that in such circumstance we will decline to enforce a law contrary to this state's fundamental policy." (Nedlloyd, supra, 3 Cal.4th at pp. 464-466, fns. omitted.)
Of some significance here, in discussing whether there was a conflict between the law chosen by the parties and a fundamental policy of California, the court stated: "We perceive no fundamental policy of California requiring the application of California law to Seawinds's claims based on the implied covenant of good faith and fair dealing. The covenant is not a government regulatory policy designed to restrict freedom of contract, but an implied promise inserted in an agreement to carry out the presumed intentions of contracting parties. [Citation.]" (Nedlloyd, supra, 3 Cal.4th at p. 468, italics added.)
In Washington Mutual the subject contracts were consumer loans which contained uniform preprinted choice-of-law provisions. The plaintiffs alleged the defendant bank acted unlawfully under California law in placing property insurance, and the trial court certified a nationwide class without determining what law would apply to their claims. Notwithstanding the substantially different contexts, the court in Washington Mutual found that, as in Nedlloyd, enforceability of the choice-of-law provisions was governed by section 187 of the Restatement Second of Conflict of Laws (Restatement). "Even though Nedlloyd was decided in the context of a negotiated arm's length transaction between sophisticated business entities, its analysis appears suitable for a broader range of contract transactions. California, we observe, has no public policy against the enforcement of choice-of-law provisions contained in contracts of adhesion where they are otherwise appropriate. [Citations.] More importantly, Nedlloyd's analysis contains safeguards to protect contracting parties, including consumers, against choice-of-law agreements that are unreasonable or in contravention of a fundamental California policy. [Citation.] Under Nedlloyd, which adopted the Restatement approach and found the enforceability of choice-of-law clauses closely related to that of forum-selection clauses [citation], the weaker party to an adhesion contract may seek to avoid enforcement of a choice-of-law provision therein by establishing that `substantial injustice' would result from its enforcement (Rest., § 187, com. (b), p. 562) or that superior power was unfairly used in imposing the contract [citation]. In light of these protections, we conclude Nedlloyd's analysis is properly applied in the context of consumer adhesion contracts." (Washington Mutual, supra, 24 Cal.4th at pp. 917-918, fn. omitted.) Thus the Supreme Court directed the certification order be vacated and the trial court  first consider what law would apply in light of the choice-of-law provisions in the class member's loan agreements.
Because the trial court's judgment was based on its determination that no fundamental policy of California required that California law be applied to Omni's loan agreements, we must of necessity carefully consider this aspect of section 187 of the Restatement.
(3) To be fundamental, within the meaning of section 187 Restatement, a policy must be a substantial one. (Rest., § 187, com. g, p. 568.) Thus "a policy of this sort will rarely be found in a requirement, such as the statute of frauds, that relates to formalities .... Nor is such policy likely to be represented by a rule tending to become obsolete, such as a rule concerned with the capacity of married women ..., or by general rules of contract law, such as those concerned with the need for consideration...." (Ibid.) On the other hand the policy need not be as strong as is required when a state refuses to permit its courts to be used to prosecute a foreign cause of action. (Rest., § 187, com. g, p. 569.) In such cases, in which a state's obligations under the full faith and credit clause of the United States Constitution are implicated, the policy must involve "`some fundamental principle of justice, some prevalent conception of morals, some deep-seated tradition of the commonweal.'" (Rest., § 90, com. c, p. 267.)
The relative significance of a particular policy or statutory scheme can be determined by considering whether parties may, by agreement, avoid the policy or statutory requirement. In Hall v. Superior Court (1983) 150 Cal.App.3d 411, 418-419 [197 Cal.Rptr. 757], the court found the express antiwaiver provisions in the Corporate Securities Law of 1968 (Corp. Code, § 25000 et seq.) prevented enforcement of choice of law and forum selection clauses in a contract for the sale of securities. The court stated: "California's policy to protect securities investors, without more, would probably justify denial of enforcement of the choice of forum provision, although a failure to do so might not constitute an abuse of discretion; but [Corporations Code] section 25701, which renders void any provision purporting to waive or evade the Corporate Securities Law, removes that discretion and compels denial of enforcement." (Hall, at p. 418.) Relying on Hall v. Superior Court, the court in America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 15 [108 Cal.Rptr.2d 699], reached the same conclusion with respect to the antiwaiver provisions of the Consumers Legal Remedies Act (CLRA): "[E]nforcement of AOL's forum selection clause, which is also accompanied by a choice of law provision favoring Virginia, would necessitate a waiver of the statutory remedies of the CLRA, in violation of that law's antiwaiver  provision (Civ. Code, § 1751) and California public policy. For this reason alone, we affirm the trial court's ruling." (See also Discover Bank v. Superior Court (2005) 36 Cal.4th 148, 174 [30 Cal.Rptr.3d 76, 113 P.3d 1100].)
Consistent with Hall v. Superior Court and America Online, Inc. v. Superior Court, the requirements of a statute may also be fundamental when the Legislature provides that an agreement entered into in violation of the statute is void. (See Interinsurance Exch. v. Bailes (1963) 219 Cal.App.2d 830, 836-837 [33 Cal.Rptr. 533]; Rest., § 187, com. g ["a fundamental policy may be embodied in a statute which makes one or more kinds of contracts illegal ..."].) When the Legislature acts in this manner, it is clear it has found the particular policies which underlie a statute are more important than the more general policy in favor of the freedom to contract. (See, e.g., Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881, 900-901 [72 Cal.Rptr.2d 73] (Application Group).)
The holding in Application Group is illustrative of the kind of policy which is fundamental within the meaning of section 187 of the Restatement. (Application Group, supra, 61 Cal.App.4th at pp. 899-901.) In Application Group the court considered an employment contract, which, by its terms, was governed by the law of Maryland. The contract contained a noncompetition clause, which, although lawful under Maryland law, violated the provisions of Business and Professions Code section 16600. The court found Business and Professions Code section 16600 reflected a fundamental policy within the meaning of section 187 of the Restatement such that it prevented use of the noncompetition clause in an action against an employee who had accepted a job from a California employer. (Application Group, supra, 61 Cal.App.4th at pp. 899-901.) "`California courts have consistently declared this provision an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice. Section 16600 has specifically been held to invalidate employment contracts which prohibit an employee from working for a competitor when the employment has terminated, unless necessary to protect the employer's trade secrets. [Citation.] The corollary to this proposition is that [a competitor] may solicit another's employees if they do not use unlawful means or engage in acts of unfair competition.' [Citation.]" (Id. at p. 900.)
Applying the foregoing principles to this record, we conclude the trial court erred in enforcing the choice-of-law provisions of Omni's loan agreements.
Admittedly, because Omni is a Nevada corporation, there is a substantial relationship with Nevada such that the choice of Nevada law in the loan agreements was reasonable. (See Nedlloyd, supra, 3 Cal.4th at p. 467.) Thus under section 187 of the Restatement we must next determine whether Nevada's law conflicts with the fundamental policy of California, and, if there is such a conflict, whether California has a materially greater interest in the transactions than Nevada. (3 Cal.4th at p. 467.) We find there is such a conflict and that California's interest in the loan agreements is greater than Nevada's.
As we explain more fully below, in determining whether Nevada law conflicted with the fundamental policy of California, the trial court erred in its choice-of-law analysis. Rather than determining whether the application of the chosen state's law violated a fundamental policy of California, it isolated the difference between California's and Nevada's laws controlling finance lenders and then analyzed whether the isolated difference in the two states' laws—namely signage—was a fundamental policy. This approach led the trial court to consider each portion of the law separately and thereby minimize the impact of any deviation from the requirements of the law. As our analysis discloses, this approach was erroneous because it failed to consider the law as an integral whole, the particular parts of which reinforce each other.
In enacting the Finance Lenders Law, the Legislature directed that it "(a) ... be liberally construed and applied to promote its underlying purposes and policies, which are:
"(1) To ensure an adequate supply of credit to borrowers in this state.
"(2) To simplify, clarify, and modernize the law governing loans made by finance lenders.
"(3) To foster competition among finance lenders.
"(4) To protect borrowers against unfair practices by some lenders, having due regard for the interests of legitimate and scrupulous lenders.
 "(5) To permit and encourage the development of fair and economically sound lending practices.
"(6) To encourage and foster a sound economic climate in this state...." (§ 22001.)
The expressly articulated policies set forth in section 22001—assuring an adequate supply of credit to consumers and protection of consumers from unfair practices—are on their face of some consequence. Here, in addition to the Legislature's statement of purposes, the remedies which the Legislature has provided and the enforcement mechanism it has created make it clear not only that the requirements of the Finance Lenders Law are matters of fundamental public policy which cannot be waived by way of agreement between the parties, but that the provisions of the law must be viewed together.
(4) We begin with section 22324, which states: "Any person who contracts for or negotiates in this state a loan to be made outside the state for the purpose of evading or avoiding the provisions of this division is subject to the provisions of this division." Section 22324, by expressly preventing parties from avoiding the strictures of the Finance Lenders Law by booking or otherwise making a loan out of state, strongly suggests the Finance Lenders Law may not be circumvented by a contractual choice-of-law provision.
The fundamental and unwaivable character of the Finance Lenders Law is also suggested in section 22750. Under section 22750 contracts made in willful violation of the Finance Lenders Law, including in particular violation of the requirement that a lender have a license issued by the commissioner, are void. If the violations are not willful, the lender must nonetheless forfeit any interest or charges. (§ 22752.) In addition, willful violations of the Finance Lenders Law are punishable with both civil and criminal penalties. (§§ 22713, 22753.)
Our conclusion that the provisions of the Finance Lenders Law are fundamental, unwaivable and integrated is buttressed by considering the licensing requirements of the law and the role licensing plays in enforcing the substantive provisions of the law. Section 22100 provides: "No person shall engage in the business of a finance lender or broker without obtaining a license from the commissioner." A finance lender is entitled to receive a license upon satisfying the commissioner that no one who has more than a 10 percent interest in the lender has been convicted of a crime or committed an act of dishonesty or fraud related to consumer lending. (§ 22109.) A licensee is required to make an annual report to the commissioner and maintain records of its transactions so the commissioner can determine whether the  licensee is complying with the Finance Lenders Law and regulations promulgated by the commissioner. The commissioner may revoke or suspend a license whenever, among other matters, the commissioner finds "[t]he licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division." (§ 22714, subd. (a)(2).)
Significantly, the substantive and procedural obligations of the Finance Lenders Law are imposed on licensees and subject to enforcement by the commissioner. Under section 22150, "The commissioner may make general rules and regulations and specific rulings, demands, and findings for the enforcement of this division, in addition to, and within the general purposes of, this division." Section 22163 provides: "The commissioner may require that rates of charge, if stated by a licensee, be stated fully and clearly in the manner that the commissioner deems necessary to prevent misunderstanding by prospective borrowers." Section 22165 provides: "No advertising copy shall be used after its use has been disapproved by the commissioner and the licensee is notified in writing of the disapproval." Article 3 of the Finance Lenders Law, section 22300 et seq., imposes limitations on the conditions, rate of interest and charges licensees may impose on borrowers. Finally, the commissioner is given the power to suspend or revoke any license if the commissioner finds: "The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division." (§ 22714, subd. (a)(2).) There would be little, if any, utility in establishing this thorough licensing scheme and giving the commissioner power over licensees, if the licensing requirements of the law and the power of the department could be waived by simple agreement between lender and borrower.
(5) In sum, the Legislature, in expressly preventing any attempt to avoid its provisions by making loans outside the state, in voiding contracts made in violation of the Finance Lenders Law and in creating a licensing scheme through which it directly regulates the finance lenders market, has made it clear that the Finance Lenders Law is a matter of significant importance to the state and, like the provisions of Corporate Securities Law of 1968 and the CLRA, is fundamental and may not be waived. Just as importantly, it is obvious the statutory scheme, which depends upon both private remedies and administrative enforcement, is an integrated system of limitations and regulation which depend upon each other to achieve the overall goals of the  Legislature. Although the Finance Lenders Law does not contain an express antiwaiver provision, as did the statutes analyzed in Hall v. Superior Court and America Online, Inc. v. Superior Court, when the statutory scheme is reviewed as a whole, it is clear it represents a fundamental policy of this state.
(6) Application of the choice-of-law provision in the Omni loan agreements would undermine the fundamental policy expressed in the Finance Lenders Law. Contrary to the findings of the trial court, the conflict between Nevada law and California law is far wider than simply differing standards as to signage. As we have seen, operation of the Finance Lenders Law depends in large measure upon private enforcement, licensing and the considerable power the corporation's commissioner exercises over licensees. The choice-of-law provisions in Omni's loan agreements immunized Omni's activities in this state from this entire regulatory scheme and thereby conflicted with it in a substantial manner.
(7) Importantly, we must recognize our analytical responsibility is not complete upon finding a conflict exists between a fundamental policy of California and the law selected by the parties. (Rest. § 187, subd. (2)(b).) Put more narrowly, a California consumer cannot avoid the obligations of a contract with an out-of-state business by simply arguing the transaction was covered by a California licensing and regulatory scheme. Under Restatement section 187, subdivision (b)(2), we must also determine whether California's interest in enforcing its law is greater than Nevada's interest in enforcing its laws. As the court in Application Group, supra, 61 Cal.App.4th at pages 898 to 899, stated: "[A] court can decline to enforce the parties' contractual choice-of-law provision only if the interests of the forum state are `materially greater' than those of the chosen state, and the forum state's interests would be more seriously impaired by enforcement of the parties' contractual choice-of-law provision than would the interests of the chosen state by application of the law of the forum state." (Fn. omitted.)
The trial court found and the record shows that in the broadest sense California has a materially greater interest in Omni's loan transactions than Nevada. As the trial court noted, Omni's 12,000 California loans were made to California consumers, secured with collateral located in California, and provided cash that was likely spent in this state. Moreover, Omni's California competitors who are subject to California's regulatory scheme were deprived of the opportunity to make those 12,000 loans. Nevada's interest is limited to the out-of-state activities of one of its corporate citizens.
 In this regard, we reject Omni's reliance on the Pioneer letters as governing California's interest in its loan activities. The most relevant aspect of the commissioner's administrative decisionmaking is the commissioner's dogged refusal to give Omni an interpretative opinion permitting it to operate in California without a license. To the extent the commissioner's opinion was relevant in determining California's interest in Omni's activities, the commissioner's views about Omni's activities are clearly entitled to far more weight than the commissioner's views about a third party. Of course, further undermining the value of the Pioneer letter as an expression of California's interest in loans to nonresident members of the military is the fact that the commissioner has abandoned the reasoning in that letter.
(8) In any event, although relevant, the question we confront is more nuanced than simple consideration of which state has a greater economic interest in or connection to the parties' dispute. (See Application Group, supra, 61 Cal.App.4th at p. 903.) Rather, we must consider which state, in the circumstances presented, will suffer greater impairment of its policies if the other state's law is applied. (Ibid.) Here, application of Nevada law would deprive a substantial segment of the borrowing public in this state of the substantive and regulatory protection California affords all of its other consumers. Nevada on the other hand has no policy which prevents its lenders from subjecting themselves to the regulatory authority of other states. That is to say, nothing in Nevada law prevented Omni from fully complying with California law. Rather, Nevada's interest in applying its law is limited to its more general interest in enforcing the provisions of contracts made by one of its citizens. Given these circumstances, application of Nevada law would impair California's regulatory interests to a far greater extent than application of California law would impair Nevada's interests.
In sum, although there was a reasonable basis for selecting Nevada law in the loan agreements, its application here conflicted with a fundamental policy of this state in circumstances in which California has a greater interest than Nevada. Hence the choice-of-law provisions of Omni's loan agreements are not enforceable here. (See Nedlloyd, supra, 3 Cal.4th at p. 465.) Thus we reverse the judgment of dismissal. Plaintiff may proceed with the lawsuit. In  doing so, we express no opinion as to Omni's liability, if any, or any other affirmative defense Omni may assert.
Plaintiff to recover his costs of appeal.
Haller, J., and Irion, J., concurred.
 Omni Loan Company, Ltd., and Omni Financial Corporation were founded by Fred Nives, who was the principal shareholder of both corporations. All references to Omni include Omni Financial Corporation unless otherwise indicated.
 All further statutory references are to the Financial Code unless otherwise specified.
 Omni Financial Corporation is headquartered in New Rochelle, New York, and provides a variety of management services to Omni Loan Company and its affiliates.
 Omni filed a notice of cross-appeal from that portion of the trial court's judgment which rejected its commerce clause defense. However, according to its respondent's brief, Omni has elected not to appeal the trial court's judgment.
 We note many out-of-state cases have refused to enforce choice-of-law provisions because they would conflict with the antiwaiver provisions of applicable statutory schemes. (See Cottman Transmission Systems, LLC v. Kershner (E.D.Pa. 2007) 492 F.Supp.2d 461; Volvo Const. Equip. North America v. CLM Equip. (4th Cir. 2004) 386 F.3d 581, 607-610; Cromeens, Holloman, Sibert, Inc. v. AB Volvo (7th Cir. 2003) 349 F.3d 376, 391; Wright-Moore Corp. v. Ricoh Corp. (7th Cir. 1990) 908 F.2d 128, 132; Pinnacle Pizza Co. v. Little Caesar Enterprises (D.S.D. 2005) 395 F.Supp.2d 891, 898.)
 Sections 22300, 22301, 22303, 22304, and 22305 limit the charges and interest licensees may receive for small loans. Section 22320.5 regulates the amount of late fees and delinquency fees a licensee may charge. Section 22334 regulates the maximum term of small loans. Section 22337 regulates the documentation licensees must provide when a loan is made and when it has been paid.
 As the court in Application Group noted: "One of the difficulties in these cases is that the `materially greater interest' test of subdivision (2)(b) of section 187 of the Restatement overlaps with the `governmental interest' and `comparative impairment' analyses that must be conducted in California to determine which state `would be the state of the applicable law in the absence of an effective choice of law by the parties' [citation]. [None of the cases] disclosed by our research ... discusses the relationship between and among these tests. The approach utilized by the Ninth Circuit for dealing with that problem ... appears to have been to first examine the respective `governmental interests' of the chosen and forum states and then determine the extent to which those interests would be impaired by application of the other state's laws. [Citation.]" (Application Group, supra, 61 Cal.App.4th at p. 898, fn. omitted.)
United States Court of Appeals, Seventh Circuit.
 Philip A. Whistler, Cory Brundage, Fred R. Biesecker, Ice, Miller, Donadio & Ryan, Indianapolis, Ind., Vincent J. Backs, Beers, Mallers, Backs, Salin & Larmore, Fort Wayne, Ind., for plaintiff-appellant, cross-appellee.10
James P. Fenton, Robert S. Walters, Barrett & McNagny, Fort Wayne, Ind., for defendant-appellee, cross-appellant.11
Before BAUER, Chief Judge, and FLAUM and RIPPLE, Circuit Judges.12
As Amended on Denial of Rehearing and Rehearing En Banc August 28, 1990.13
This case arises out of defendant Ricoh Corporation's ("Ricoh") refusal to renew its national distributorship agreement with plaintiff Wright-Moore Corporation ("Wright-Moore") after the expiration of its one year term. On a motion for summary judgment, the district court, applying Indiana law, held that Ricoh had good cause not to renew Wright-Moore's franchise agreement and did so without bad faith or discrimination, in compliance with the Indiana franchise statutes. See IND.CODE §§ 23-2-2.5-1, et seq., 23-2-2.7-1, et seq. The court further held that Ricoh did not breach its contract with Wright-Moore and did not engage in fraud or misrepresentation with respect to the contract. Finally, the court refused to estop Ricoh from not renewing Wright-Moore based on oral representations made prior to the formation of the contract. Wright-Moore appeals the grant of summary judgment and Ricoh cross-appeals claiming that, in the event we hold for Wright-Moore, venue was improper. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.15
Wright-Moore is an Indiana corporation having its principal place of business in Fort Wayne, Indiana. It is an independent distributor of copiers, related parts, and supplies. Wright-Moore has developed a network of independent, authorized dealers to purchase and resell its products which it supports by providing service training for the products they handle and offering the independent dealers favorable credit terms and minimal inventory requirements. Ricoh is a New York corporation with its principal place of business in West Caldwell,  New Jersey. It manufactures copiers, related parts and supplies, and distributes them both through independent distributors (such as Wright-Moore) and its own network of retail dealers.17
In early 1984, the parties entered into a one year agreement whereby Wright-Moore agreed to distribute Ricoh 3000 Series copiers. In July, 1984, the parties entered into a second (and superceding) one year agreement under which Wright-Moore was appointed a national distributor of both the Series 3000 and the Series 4000 Ricoh copiers. Under the agreement, Wright-Moore was required to purchase 2,850 copiers during the one year contract term and to bear the costs of providing Ricoh-prescribed training courses for the service personnel of each dealer to whom Wright-Moore sold a Series 4000 machine. To meet this requirement, Wright-Moore, at its own cost, sent employees to Ricoh's headquarters for training and these employees, in turn, trained the service personnel of each dealer. The agreement also required Wright-Moore to maintain an extensive inventory of copier parts.18
According to the agreement, the sole relationship between the parties was that of supplier and distributor. Wright-Moore's territory was defined as the continental United States, and Wright-Moore was permitted to sell as a wholesaler to retailers not affiliated with Ricoh. Wright-Moore was forbidden from using any Ricoh trademark in connection with Wright-Moore's name but was permitted to state that it was authorized to distribute certain Ricoh products. The agreement provided that the courts of Manhattan would have exclusive jurisdiction over any controversy arising out of the agreement and that New York law would govern any disputes. The agreement also contained an integration clause nullifying all prior agreements and understandings.19
A second, related agreement, styled a "letter agreement," was completed simultaneously with the distributorship agreement. Wright-Moore agreed in the letter agreement to purchase immediately 1,200 machines towards the 2,850 requirement. The letter agreement also provided Wright-Moore with "price protection" in the event of a price change and allowed Wright-Moore to purchase more copiers on the same credit terms as the 1,200 machines provided for in the letter agreement.20
Wright-Moore performed up to Ricoh's expectations during the contract term. At the end of the term, however, Ricoh refused to renew the distributorship and Wright-Moore filed this suit against Ricoh in the Northern District of Indiana. It claimed violations of the Sherman Act and the Indiana franchise statutes, breach of contract, fraud, misrepresentation and estoppel and sought compensatory and punitive damages. Wright-Moore claimed that it had been assured by Ricoh that its relationship with Ricoh would be long term and that under Ricoh policy, Wright-Moore's national distributorship would be renewed as long as it satisfied its financial obligations to Ricoh and met its minimum purchase agreements. Wright-Moore contended that the continued success of its dealers caused dealers in Ricoh's own network to complain that its aggressive pricing policy cut into their profits. As a result, Ricoh and its authorized dealers conspired against it, culminating in Ricoh's refusal to perform its obligations under the letter agreement (specifically, Ricoh changed the credit terms and did not give it price protection) and refusal to renew the distributorship agreement as contemplated by the parties.21
As a defense, Ricoh offered evidence that the refusal to renew was based on a change in marketing strategy. In early 1985, James Ivy, Ricoh's new vice-president for sales and marketing, undertook a review of Ricoh's distribution system to determine whether the existing distribution network was appropriate for the effective marketing of Ricoh's copiers. At that time, Wright-Moore, together with three other independent dealers, served as national distributors of the Ricoh 3000 and 4000 Series copier. These machines were also marketed through regional distributors and through Ricoh's own dealer network. The overlap of responsibility between the national and regional distributorships  along with the resulting competition prevented the development of strong regional distributors which Ivy believed could best market the products. Ivy, therefore, decided that Wright-Moore and the other national distributorship agreements should not be renewed. In January of 1985, a meeting was held between Ricoh and Wright-Moore at which Wright-Moore was informed that Ricoh was considering removing the 3000 and 4000 Series copiers from national distribution. Ricoh discussed with Wright-Moore several alternatives, including regional distributorships of the 3000 and 4000 Series copiers or a national distributorship for two other copier models, but no agreement was reached.22
Based on this evidence, Ricoh moved for summary judgment. The district court determined that there was no evidence of a conspiracy in violation of the Sherman Act. With respect to the Indiana franchise statutes, the court held that the choice of law clause in the contract was contrary to Indiana public policy as stated in the franchise statutes and, therefore, it would apply Indiana law rather than New York law. It further held that there was a material issue of fact with respect to Wright-Moore's qualification as an Indiana franchise. It found, however, that the evidence established that Ricoh was motivated by its economic self-interest and did not act in bad faith or with discriminatory purpose. Economic self-interest, the court held, was sufficient to satisfy the good cause requirement of the Indiana franchise statutes.23
With respect to the breach of contract claims, the court determined that, on its face, the letter agreement's credit terms for future orders of copiers might have been breached but that properly interpreted in conjunction with the distributorship agreement, it was, in fact, not breached because the distributorship agreement allowed Ricoh to unilaterally change terms of credit. The court further determined that the price protection clause of the letter agreement had not been breached because it only provided price protection if Ricoh were to offer a lower price to another distributor, a condition precedent which had not occurred.24
The court also found no fraud or misrepresentation because Ricoh had made statements only with respect to its future actions and Indiana law expressly prohibits fraud or misrepresentation claims based on representations of future actions. The court held that the same was true for the Indiana franchise statute's fraud provision. Finally, the court held that Ricoh is not estopped from not renewing the contract because Wright-Moore could not reasonably rely on Ricoh's oral representations made prior to formation of the contract. The court, therefore, granted Ricoh summary judgment. The court expressly refrained from reaching the forum selection clause of the distributorship agreement.25
Wright-Moore appeals claiming that there were material issues of fact with respect to the franchise, contract, fraud and misrepresentation claims. In addition, Wright-Moore maintains that the district court made errors of law. Specifically, Wright-Moore claims that: (1) under Indiana franchise law, economic self-interest is not good cause for nonrenewal of a contract; (2) the court misinterpreted the letter agreement by reading it in conjunction with the distributorship agreement; and (3) the court's reading of the agreement was in violation of Indiana franchise law. Wright-Moore has abandoned the Sherman Act counts on appeal. Ricoh cross-appeals, arguing that, in the event that we hold for Wright-Moore, the forum selection clause requires a change in venue.26
Wright-Moore's appeal raises several significant issues under the Indiana franchise laws. IND.CODE §§ 23-2-2.5-1, et seq., 23-2-2.7-1, et seq. Wright-Moore argues that the district court erred as a matter of law in holding that non-renewal for the economic purposes of the franchisor consitutes good cause under IND.CODE § 23-2-2.7-1(7). In addition, Wright-Moore claims that summary judgment was improper because there were material issues of fact with respect to Ricoh's good  faith during termination and with respect to the claim of discrimination. Ricoh supports the district court's holding but argues in the alternative that the contractually chosen New York law applies rather than Indiana law and, in addition, that Wright-Moore was not a franchise.29
We begin with the choice of law question. Wright-Moore claims Indiana franchise law applies, despite the choice of New York law in the agreement, on the ground that the Indiana franchise statutes prohibit waiver of its protections and prohibit "limiting litigation brought for breach of the [franchise] agreement in any manner whatsoever." IND.CODE § 23-2-2.7-1(10). Ricoh argues that the express choice of law provision of the contract should govern. The district court held that Indiana has articulated a strong public policy against allowing parties to contract out of the protections of its franchise law and that this public policy overrides the choice of law provided for in the agreement.31
Indiana has long adhered to the "most intimate contacts" test for choice of law. W.H. Barber v. Hughes, 223 Ind. 570, 63 N.E.2d 417 (1945). This approach has since been elaborated in the Restatement (Second) Conflict of Laws § 188 (the "Restatement"). See Utopia Coach Corp. v. Weatherwax, 177 Ind.App. 321, 325, 379 N.E.2d 518, 522 (1978) (the Restatement approximates Indiana law). Under this approach, "the court will consider all acts of the parties touching the transaction in relation to the several states involved and will apply as the law governing the transaction the law of that state with which the facts are in most intimate contact." W.H. Barber, 63 N.E.2d at 423. This approach also recognizes that parties may expressly choose the applicable law through a contract. "The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue." Restatement § 187(1). Typical issues that cannot be determined by explicit agreement include capacity, formalities, substantial validity, and illegality, but the set issues which cannot be contractually chosen is determined by local law. Id. at comment d. If the issue is one which could not have been explicitly resolved by the contract, the choice of law provisions of the contract will still apply unless the "chosen state has no substantial interest" in the litigation or "application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of applicable law in the absence of an effective choice of law by the parties." Id. at § 187(2).32
We agree with the district court that enforcement of the choice of law provision in the distributorship agreement would be contrary to Indiana's express public policy. Indiana has made it unlawful to enter into a franchise agreement "requiring the franchisee to prospectively assent to a release ... [or] waiver ... which purports to relieve any person from liability to be imposed by this chapter" or to enter into an agreement "limiting litigation brought for breach of the agreement in any manner whatsoever." IND.CODE § 23-2-2.7-1(10). We owe deference to the district judge's interpretation of the law of the state in which the judge sits, see, e.g., Moore v. Tandy Corp., 819 F.2d 820, 823 (7th Cir.1987), and the district judge here found that these provisions articulated a strong state policy against allowing contractual choice of law provisions to control the applicability of these provisions to Indiana franchises. The public policy, articulated in the nonwaiver provisions of the statute is clear: a franchisor, through its superior bargaining power, should not be permitted to force the franchisee to waive the legislatively provided protections, whether directly through waiver provisions or indirectly through choice of law. This public policy is sufficient to render the choice to opt out of Indiana's franchise law one that cannot be made by agreement.33
Indiana law, following the Restatement, however, permits state public policy to override the contractual choice of law  only if the state has a materially greater interest in the litigation than the contractually chosen state. Thus, for the Indiana public policy to control the choice of law, Indiana must have a materially greater interest in the litigation than does New York. We conclude that this is the case here. Wright-Moore is potentially a franchisee and is incorporated and located in the state of Indiana; its witnesses and documents are there; the contract negotiations occurred there; and the contract was, in part, performed there. New York's only connection to this litigation is that the defendant is incorporated in New York. The defendant's principal place of business is New Jersey. Indiana, therefore, has a materially greater interest in the litigation than New York. Since Indiana has a materially greater interest than New York and application of New York law would be contrary to a fundamental Indiana policy, Indiana franchise law governs this case.34
Ricoh offers Modern Computer Systems, Inc. v. Modern Banking Systems, Inc., 871 F.2d 734 (8th Cir.1989) (en banc), for the proposition that the contractual choice of law should apply in this case. In Modern Computer, the Eighth Circuit held that Minnesota franchise law did not override the choice of law provision in the parties' contract. The court, relying on a Sixth Circuit case, Tele-Save Merchandising Co. v. Consumers Distribution Co., 814 F.2d 1120 (6th Cir.1987), gave four reasons for its decision: the parties had agreed to the choice of law in the contract; the contracts between the forum and the competing states were evenly divided; the parties were not of unequal bargaining power; and the application of the law chosen in the contract was not against Minnesota's public policy. Modern Computer, 871 F.2d at 738-39. The court noted that Minnesota's strong public policy in favor of recognition of contractual choice of law outweighed Minnesota's policy against waiver of its franchise law's provisions. Minnesota has, however, legislatively overruled Modern Computer. The statute now reads "any condition, stipulation or provision, including any choice of law provision, purporting to bind any person ... is void." Minn.Stat. § 80C.21 (emphasis added).35
Insofar as the case remains a valid interpretation of Minnesota law prior to these changes in the statute (a questionable assumption given the immediacy of the changes after the case), Ricoh argues that its logic still applies here. We are not convinced, however, that Indiana would apply the Modern Computer analysis to determine its choice of law, at least insofar as it conflicts with the "most intimate contacts" test. Even under such an analysis,  Indiana and not New York law would apply. The strength of nonwaiver provisions among states varies. For example, Wisconsin does not permit parties to avoid the effects of its franchise law through contractual choice of law provisions; Wisconsin law governs all Wisconsin franchises. See Bush v. National School Studios, Inc., 139 Wis.2d 635, 407 N.W.2d 883, 886 (1987). Wisconsin bases this decision on the belief that most franchisors are more powerful than franchisees, and for the law to have any impact, the parties must not be able to contract out of its protections. See Wis.Stat. § 135.025(3). Minnesota has now followed Wisconsin by explicitly amending its statute. Indiana has also articulated a strong public policy with respect to contractual waiver of actions under its franchise law. Indiana has made it unlawful to require the franchisee to enter into an agreement "limiting litigation brought for breach of the agreement in any manner whatsoever." IND.CODE § 23-2-2.7-1(10) (emphasis added). Indiana has also made it unlawful for a franchise agreement to "requir[e] the franchisee to prospectively assent to a release, ... waiver, or estoppel which purports to relieve any person from liability to be imposed by this chapter." Id. at 1(5). We believe that these statements evince a legislative policy against waiver of Indiana franchise law through choice of law provisions and, therefore, we are not convinced that Modern Computer applies to Indiana.36
Ricoh argues that Wright-Moore is not a franchisee and, therefore, Indiana franchise law does not apply. To qualify as a franchisee under Indiana law, three requirements must be satisfied: (1) the franchisee must be granted the right to engage in the business of dispensing goods or services under a marketing plan; (2) under the marketing plan, the franchisee must be substantially associated with the franchisor's trademark; and (3) the franchisee must pay a franchise fee. IND.CODE § 23-2-2.5-1(a). The district court held that there were sufficient issues of material fact under these elements to preclude summary judgment on Wright-Moore's fulfillment of these requirements.38
Ricoh vigorously contests this conclusion. Primarily, it argues that Wright-Moore does not intuitively match the type of entity the Indiana legislature envisioned when writing the statute. Invoking the image of a "mom and pop" franchisee, Ricoh maintains that Wright-Moore was instead a national wholesale distributor of equal bargaining power to Ricoh and therefore bears none of the "hallmarks" of a franchisee. While this argument has some appeal, it is up to the Indiana legislature to decide what the "hallmarks" of a franchisee are and it has done so through its three statutory requirements. Ricoh's arguments are best addressed to these requirements and we address each element in turn.39
With respect to the right to dispense goods, Ricoh argues that there is no evidence that Wright-Moore was constrained by a marketing plan. In Master Abrasives  Corp. v. Williams, 469 N.E.2d 1196, 1200 (Ind.App.1984), the Indiana Court of Appeals held that a marketing plan existed where the agreement allowed the franchisor to prescribe sales territories and sales quotas, approve sales personnel, and establish mandatory training. Our review of the record indicates that there is evidence that these elements are present here: Wright-Moore had a quota of copiers to sell; its territory was national; and Ricoh required personnel to go through mandatory training before allowing them to sell copiers. This is sufficient under Master Abrasives to establish a marketing plan.40
Ricoh also contends that Wright-Moore was not substantially associated with its trademark. Ricoh primarily points to Article 6(b) of the distributorship agreement which prohibited Wright-Moore from using Ricoh's name or trademark in any manner. The same clause of the distributorship agreement, however, permits Wright-Moore to state in writing that it is an authorized distributor for certain Ricoh products. Moreover, Wright-Moore was provided with advertising materials with Ricoh's trademark. In Master Abrasives, the court held that "distribution of products or services covered by [the franchisor's] trademark" was sufficient to satisfy the substantial association requirement. Id. at 1199. Wright-Moore clearly meets this standard.41
Finally, Ricoh contends that Wright-Moore did not pay a franchise fee. Indiana defines a franchise fee as:42
any fee that a franchisee is required to pay, directly or indirectly, for the right to conduct a business to sell, resell, or distribute goods, services or franchises under a contract agreement including, but not limited to, any such payment for goods or services.43
IND.CODE § 23-2-2.5-1(i). The statute expressly states that franchise fees do not include "the purchase or agreement to purchase goods at a bona fide wholesale price." Id. at 1(i)(3). Wright-Moore admits that it did not pay a direct franchise fee, but maintains that it paid indirect fees by way of payments for training, payments to maintain excess inventory, and ordinary business expenses.44
To date, there is no published Indiana case that considers indirect franchise fees and the term is given little definition in the statute. The statute simply indicates that purchases at bona fide wholesale prices are not indirect fees. Since Indiana's franchise law has no legislative history, we interpret Indiana's law by reference to similar laws in other states and the purposes behind those laws.45
The general policy behind franchise laws is particularly helpful in delineating the scope of the franchise fee requirement. The purpose of most franchise laws is to protect franchisees who have unequal bargaining power once they have made a firm-specific investment in the franchisor. See Note, Constitutional Obstacles to State "Good Cause" Restrictions on Franchise Terminations, 74 COLUM.L.REV. 1487 (1974). For example, the Wisconsin statute expressly states that its purpose is to protect dealers against "unfair treatment" from franchisors who "inherently have superior economic power and superior bargaining power." Wis.Stat. § 135.025(2). Our cases reflect this policy. "[W]e have deduced from the structure and history of the [Wisconsin] statute a central function: preventing suppliers from behaving opportunistically once franchisees or other dealers have sunk substantial resources into tailoring their business around, and promoting, a brand." Kenosha Liquor Co. v. Heublein, Inc., 895 F.2d 418, 419 (7th Cir.1990) (citations omitted). "The franchisor (supplier) may be able to change the terms for the worse after the franchisee (dealer) has invested much of its capital in firm-specific promotion, training, design, and other features. Once the dealer is locked into the supplier, the supplier may seek to extract what an economist would call a quasi-rent." Fleet Wholesale Supply v. Remington Arms Co., 846 F.2d 1095, 1097 (7th Cir.1988). The reason for the franchise fee requirement, in this light, is to insure that only those entities that have made a firm-specific investment are protected under the franchise laws; where there is no investment, there is no fear of inequality of bargaining  power. Id. Wright-Moore's alleged fees must, therefore, show evidence of unrecoverable investment in the Ricoh distributorship.46
Wright-Moore's first alleged fee was the cost of excess inventory. Courts and administrative bodies that have considered excess inventory requirements have held that the costs of required excess inventory can constitute a franchise fee, and we agree. For example, the Illinois franchise statute, which is almost identical to Indiana's statute, contains regulations interpreting the Illinois definition of franchise fees. 1211/2 ILL.REV.STAT. § 1703(14). These regulations explicitly include excess inventory, stating that "an indirect franchise fee ... is present despite the bona fide wholesale or retail price exceptions if the buyer is required to purchase a quantity of goods so unreasonably large that such goods may not be resold within a reasonable time." 14 Ill.Adm.Code, Ch. II § 200.108. Minnesota courts agree with Illinois that excess inventory can constitute a franchise fee. See American Parts System, Inc. v. T & T Automotive, Inc., 1984 Bus. Franchise Guide (CCH) ¶ 8262 (Minn.App.1984); see also Schultz v. Onan Corp., 737 F.2d 339, 346-47 (3rd Cir.1984). The purpose of the fee requirement also indicates that, depending on the particular facts of a case, investments in excess inventory may constitute an indirect franchise fee. If, for example, the excess inventory were not liquid or were such that the franchisor could prevent it from being liquid (perhaps by preventing the franchise from claiming it is an authorized dealer), then the excess inventory might be a franchise fee. A normal sales quota, however, is not enough to create a franchise fee because of the bona fide wholesale price exception. The quantity of goods must be so unreasonably large that it is illiquid.47
Costs incurred in training, Wright-Moore's second alleged fee, may, for the same reasons, also result in an indirect franchise fee. Training can be highly firm-specific. Technicians trained to service Ricoh copiers may not be able to service other copiers. Costs incurred during training may be substantial and unrecoverable, locking the franchise into the franchisor.48
Wright-Moore's third alleged franchise fee is simply ordinary business expenses. We noted in Communications Maintenance, Inc. v. Motorola, Inc., 761 F.2d 1202, 1206 n. 3 (7th Cir.1985), that business expenses in the form of a discount given by the franchisee on goods or services it is required to tender to the franchisor would constitute an indirect franchise fee. Nevertheless, unless the expenses result in an unrecoverable investment in the franchisor, they should not normally be considered a fee. The bona fide wholesale price exception confirms this. In addition, the language of the statute indicates that ordinary business expenses may not be indirect fees. The statute defines a franchise fee as a fee paid for the right to do business, not as fees paid during the course of business. IND.CODE § 23-2-2.5-1(i); see also RJM Sales & Marketing v. Banfi Products Corp., 546 F.Supp. 1368, 1373 (D.Minn.1982) (ordinary business expenses are not franchise fees).49
The evidence on each of these alleged fees is unclear at this point in the litigation. For example, there is conflicting evidence about whether the amount Wright-Moore was required to purchase was excessive. Similarly, there is conflicting evidence about the nature and extent of the training program and we know almost nothing about the ordinary business expenses. Each of these matters is very fact specific and calls for judgment based on the individual circumstances of each case. We conclude, as did the district court, that summary judgment was not appropriate on the issue of whether Wright-Moore was a franchisee.50
IND.CODE §§ 23-2-2.7-1(7) and (8) declare unlawful any provision in a franchise agreement which permits the franchisee to be terminated or not renewed "without good cause or in bad faith." The district court found that Wright-Moore did not put forth sufficient evidence to show that its nonrenewal was in bad faith. The  court found instead that Wright-Moore's nonrenewal was based on economic reasons internal to Ricoh, which the court held was good cause in compliance with IND.CODE § 23-2-2.7-1(7). The district court also found that Wright-Moore was not discriminated against in violation of IND.CODE § 23-2-2.7-2(5) because none of Ricoh's national distributors were renewed and consequently Wright-Moore cannot show treatment different from similarly situated franchises. Wright-Moore contests these conclusions.52
Wright-Moore argues that it has put forth sufficient evidence of a vendetta between executives of Ricoh and Jack Wright, the president of Wright-Moore, for a jury to conclude that bad faith motivated its nonrenewal. Specifically, Wright-Moore relies largely on a claim that Edward Kane, the eastern zone manager for Ricoh, testified (albeit under a hearsay objection) that Ricoh's national sales manager, Bill Johnson, had a personal dislike for Jack Wright. We believe that this evidence is insufficient to survive a motion for summary judgment. Our inquiry under Rule 56 is "the threshold inquiry of determining whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Id. 106 S.Ct. at 2512. Kane's lone statement is contradicted by affidavits from Ricoh and by other statements within Kane's own deposition. In addition, Kane's statements about Johnson are hearsay as they are merely Kane's feelings about unstated feelings of Johnson about a third party. Wright-Moore has put forth no direct or substantial evidence of bad faith and bald assertions will not suffice. This simple statement of Kane's belief about someone's personal dislike is insufficient to overcome a summary judgment motion. The district court did not engage in the weighing of evidence and credibility to come to its conclusion; were a jury to conclude that Ricoh terminated Wright-Moore in bad faith, the district court would be compelled to grant a directed verdict. The district court, after an extensive review of the evidence, concluded that Ricoh terminated Wright-Moore to implement what it thought was a more effective marketing plan, and we agree.53
Wright-Moore also argues that the district court erred in holding that termination for the franchisor's own economic reasons constitutes good cause. The statute defines good cause to "include any material violation of the franchise agreement." IND.CODE § 23-2-2.7-1(7). There is no evidence that Wright-Moore breached the franchise agreement, so Ricoh's actions did not fall within the plain terms of the statute. Good cause, however is defined to include breach of the franchise agreement. The language of the statute does not indicate that it is limited to breach. The question is whether good cause also includes termination for the benefit of the franchisor's balance sheet.54
Indiana courts have not yet considered this issue. We believe, however, that the language and structure of the Indiana law, along with the guidance provided by interpretation of franchise laws in other states, compel a conclusion that the internal economic reasons of the franchisor are not, by themselves, good cause for termination or nonrenewal of a franchise. Primarily, Ricoh's suggested conclusion that the franchisor's economic reasons would constitute good cause directly contravenes the very purpose of franchise statutes and would render the statutes ineffective. As noted above, franchise statutes are designed to prevent franchisors from extracting quasi-rents from franchisees. They are designed to ensure fair dealing between the parties. If the business reasons of the franchisor were sufficient, the protections of the statute would be meaningless since it is in the franchisor's short term business interest (and therefore good cause) to act opportunistically. (While this may not be effective in the long term as the franchisor may lose reputation or good will, a court is unlikely to make this determination.) Even absent opportunistic behavior, a franchisor could  virtually always claim a plausible business reason for termination. Without a smoking gun, it would be difficult, if not impossible, for a franchisee to prove that a particular action is not in the business interests of the franchisor. Ricoh's suggested reading would, therefore, allow franchisors to extract rents from franchisees, the very behavior the statutes are designed to prevent.55
This reasoning is supported by the decisions of several courts. In Kealey Pharmacy & Home Car Services, Inc. v. Walgreen Co., 761 F.2d 345 (7th Cir.1985), we held that Walgreen's termination of all its Wisconsin franchises and replacement with Walgreen-owned stores was not supported by good cause. Walgreen had valid business reasons to make this change. Nevertheless, we held that because Walgreen intended to appropriate the good will established by the franchisees, Walgreen's behavior was opportunistic and therefore, economic justifications alone were not sufficient. See also Remus v. Amoco Oil Co., 794 F.2d 1238, 1241 (7th Cir.1986) (good cause is limited to faults with the franchisee); Carlos v. Philips Business Sys., 556 F.Supp. 769, 776 (E.D.N.Y.1983), aff'd, 742 F.2d 1432 (2nd Cir.1983) (restructuring designed to "address the market place as it exists today" is not good cause under the New Jersey franchise act); General Motors Corp. v. Gallo GMC Truck Sales, 711 F.Supp. 810 (D.N.J.1989) ("It is a violation of the [New Jersey franchise] Act,  to cancel a franchise for any reason other than the franchisee's substantial breach ...").56
In addition, the structure of the Indiana statute indicates that good cause refers only to problems with the performance of the franchisee. Sections 23-2-2.7-1(7) and (8) prohibit termination or nonrenewal without good cause and list material violations of the franchise agreement as an example of good cause. The language of the statute is inclusive; the statute does not say material violations of the agreement are the sole legal cause for termination. The statute simply says that good cause includes material violations of the agreement. But as an example of the type of cause that the legislature had in mind, this indicates that the statute may be limited to other problems with the performance of the franchisee. Economic reasons internal to the franchisor do not fit this pattern; they generally have nothing to do with the performance of the franchisee.57
Other franchise statutes have been interpreted in this manner. In Solman Distributors Inc. v. Brown-Forman Corp., 888 F.2d 170, 172 (1st Cir.1989), the First Circuit held that business reasons of the franchisor were not good cause under the Maine franchise statute. The court examined the structure of the Maine franchising statute to determine that the franchisor's business needs are not cause for termination. Similarly, in Remus, 794 F.2d at 1240, we examined the structure of the good cause in Wisconsin to find that good cause is limited to the errors and omissions of the franchisee. We held that the statute gave dealers a kind of "tenure" where good cause "refers only to errors and omissions of the dealer." Id.58
The district court relied on American Mart Corp. v. Joseph E. Seagram & Sons, Inc., 824 F.2d 733, 734 (9th Cir.1987) (per curiam) for its holding. In American Mart, the Ninth Circuit held that Seagram's adoption of a new, nationwide marketing plan justified its termination of its Nevada franchises on the basis that the terminations were warranted by compelling business considerations and constituted a valid business judgment. American Mart is contrary to the majority of cases, as cited above, and does not provide any reasoning for its holding. To the extent that it is contrary to our holding, we find it unpersuasive.59
 In sum, we believe that the structure of the Indiana statute, and the policies behind the law, are sufficient to determine that under Indiana law, economic reasons internal to the franchisor are not sufficient to meet the good cause requirement. The purpose of the franchise statute is to protect the franchisee, and Ricoh's suggested reading of the statute is contrary to this purpose and would effectively nullify the statute. The structure of the statute further supports this result. We recognize Ricoh's concern that this decision makes the business decision to terminate or not renew a franchise that has not breached the franchise agreement much more expensive, but this concern is best addressed to the Indiana legislature.60
Finally, with respect to the Indiana franchise laws, Wright-Moore claims that it was unfairly discriminated against in violation of IND.CODE § 23-2-2.7-2(5) which prohibits "discriminating unfairly among ... franchisees...." It claims that there were four national distributors and while all were terminated, at least one was offered a regional distributorship after its termination as a national distributor. This evidence, however, does not support the claim of discrimination. "Discrimination among franchisees means that as between two or more similar franchisees, and under similar financial and marketing conditions, a franchisor engaged in less favorable treatment towards the discriminatee than towards other franchisees." Canada Dry v. Nehi Beverage Co., 723 F.2d 512, 521 (7th Cir.1983). "Thus, proof of discrimination requires a showing of arbitrary disparate treatment among similarly situated individuals or entities." Id.61
The evidence does not support Wright-Moore's claim. Most of the evidence relied on by Wright-Moore is the same evidence that it argued supported its claim of bad faith termination. As we noted above, this evidence was insufficient to create a material issue of fact with respect to bad faith. More importantly, Wright-Moore admits that it was the only true national distributor; all the other so-called national distributors only operated in smaller regions of the country. There is, therefore, no similarly situated distributor. Finally, even if all the so-called national distributors are considered similarly situated, none of them were renewed. This is strong evidence that there was no discrimination. While one of the national distributors became a regional distributor, this is not sufficient evidence of discrimination against Wright-Moore; it shows that failure to grant regional distributorships was the rule rather than the exception. We conclude that there is no issue of material fact with respect to discrimination and Ricoh was entitled to summary judgment on this count.62
Wright-Moore raises two contract claims, both involving the letter agreement. First it argues that Ricoh breached the terms of the letter agreement when it unilaterally changed the terms of credit. Second, it argues that Ricoh failed to provide it with "price protection" by not preserving Wright-Moore's discount margin over other distributors. The district court held that  Ricoh had the power to unilaterally change the terms of credit under the distributorship agreement, which it determined controls the interpretation of the letter agreement, and that price protection did not require Ricoh to preserve Wright-Moore's margin, but rather only required Ricoh to refrain from selling copiers to anyone else at a lower price.64
With respect to the unilateral change in the credit terms, we need not reach the issue of whether the letter agreement is controlled by the clause in the distributorship agreement permitting unilateral modification, which was the basis of the district court's holding. Indiana franchise law makes it unlawful for a contract to allow "substantial modification of the franchise agreement by the franchisor without the consent in writing of the franchisee" IND.CODE § 23-2-2.7-1(3). The distributorship agreement could not lawfully allow substantial changes in the contract. Ricoh contends that the modification was not substantial. This is, however, a mixed question of fact and law and there is no evidence in the record on this issue. Summary judgment, therefore, was not appropriate with respect to this contract claim.65
Wright-Moore's second contract claim does not survive summary judgment. The letter agreement simply provides that Ricoh "will provide [Wright-Moore] with price protection" on the purchase of 1,200 copiers. Price protection is not defined in the letter agreement, but it is defined in the accompanying distributorship agreement. Article 2(b) of the distributorship agreement provides that "[i]f Ricoh lowers the price of any product within 60 days of its acceptance of an order from distributor for that product, such lower price shall apply to that previously accepted order." As the district court noted, in Indiana, "[w]hen writings are executed at the same time and relate to the same transaction or subject matter, they must be construed together in determining the contract ..." Goeke v. Merchants Nat'l Bank & Trust Co., 467 N.E.2d 760, 768 (Ind.App.1984). The documents here should be read together under Goeke and because the cursory use of the term "price protection" in the letter agreement indicates that its definition is contained elsewhere in the parties' various agreements. In this case, Article 2(b) provides that price protection merely insures that no one else receives a lower price, not that Wright-Moore's margin be protected. If the parties had desired to protect Wright-Moore's margin, it would have been simple to say so. Instead, nothing in the letter agreement gives any indication of this intent and the distributorship agreement specified protection of price, not margin. Wright-Moore has not put forth evidence that any party was offered a lower price, so summary judgment was appropriate.66
Wright-Moore's only argument against this conclusion is that the past practices of the parties indicate a different intent. When the agreement is clear on its face, we need not reach the intent of the parties, but in any case, the past practices do not reveal a different intent. Wright-Moore claims that Ricoh once offered other distributors a price break in the form of a "baker's dozen" whereby they could purchase thirteen machines for the price of twelve. Wright-Moore was also offered this deal, even though the deal had not lowered the price below that offered to Wright-Moore and, therefore, would not have caused the price protection clause to operate. While this action did preserve Wright-Moore's margin, there is no evidence that this action was required by or triggered by the price protection clause. There is also no evidence that this was the usual practice rather than an exception. We conclude that summary judgment was appropriate on the price protection claim.67
Wright-Moore claims that Ricoh must be estopped from not renewing the contract based on its representations that  the agreement would be renewed absent poor performance by Wright-Moore. Specifically, Wright-Moore alleges that Ricoh's representatives informed it on numerous occasions "that plaintiff's distributorship would be renewed as long as plaintiff met its minimum purchase requirements and fulfilled its financial obligations to Ricoh, and that defendant terminated dealer or distributor contracts only for poor performance." Wright-Moore maintains that it "relied on those promises and representations and that therefore the defendant must be equitably estopped to deny the binding nature of its promises and representations."69
Under Indiana law, "the following elements must exist to constitute equitable estoppel: there must be a false representation or concealment of material facts made with knowledge of the facts; the representation must have been made with the intention that it should be acted upon; the party to whom the representation was made must have been without knowledge or the means [to obtain] knowledge of the real facts; and that party must have relied on the representation to its prejudice." Warner v. Riddell Nat'l Bank, 482 N.E.2d 772, 775 (Ind.App.1985). "The real inquiry in most instances, then, is whether the complaining party acted reasonably when he relied on those he now seeks to estop rather than employing some other means to obtain the information." Azar's v. United States Postal Serv., 777 F.2d 1265, 1270 (7th Cir.1985).70
The district court held that Wright-Moore did not act reasonably when relying on Ricoh's alleged statements, and we agree. The agreement was specifically for one year; had Ricoh intended a longer term agreement, it could have been provided for. Moreover, the agreement contained an integration clause which provided that the agreement was "intended to be the full and complete statement of the obligations of the parties relating to the subject matter" and "supercede[d] all previous agreements, understandings, negotiations and proposals as to this agreement." Wright-Moore was not a novice in the business world and was or should have been familiar with contracts and their operation. We recently noted that Indiana courts have never abrogated a written agreement based on an oral promise made prior to the written agreement, Vickers v. Henry County Savings & Loan Ass'n, 827 F.2d 228, 233 (7th Cir.1987), and none of the cases cited by Wright-Moore support our doing so now. There is no evidence to contradict these facts and consequently, summary judgment was appropriately granted on the estoppel count.71
Wright-Moore also raises two fraud claims, one based on Indiana common law and the other based on the Indiana franchise statutes. Wright-Moore claims that Ricoh misrepresented its intent to renew the agreement when it made statements that the agreement would be renewed absent poor performance. With respect to the common law claim, the Supreme Court of Indiana has stated that "actionable fraud cannot be predicated upon a promise to do a thing in the future, although there may be no intention of fulfilling the promise." Sachs v. Blewett, 206 Ind. 151, 185 N.E. 856, 858 (1933). We have noted that "it has long been the law in Indiana that an action for fraud cannot based upon promises to be performed in the future." Vaughn v. General Foods Corp., 797 F.2d 1403, 1412 (7th Cir.1986) (citations omitted). It is clear that Wright-Moore's claim of common law fraud cannot survive because it alleges a promise to act.72
Wright-Moore's statutory fraud claim fairs no better. Indiana has defined fraud to "include any misrepresentation in any manner of a material fact, [or] any promise or representation or prediction as to the future not made honestly or in good faith...." While the state fraud provision does cover statements about future actions, and while there is evidence in the record that Ricoh did make a false prediction, there is no evidence that the prediction was not in good faith at the time it was made. This is an essential element of the claim on which Wright-Moore has failed to submit any evidence. Moreover, as noted above with respect to the estoppel claim, there was no reasonable reliance on this statement.  Without reasonable reliance on Ricoh's statements, Wright-Moore cannot show that it was damaged. Summary judgment was appropriate on the statutory fraud claim.73
The case is remanded for proceedings consistent with this opinion.75
RIPPLE, Circuit Judge, dissenting.76
The task that the court undertakes in this case is indeed a most difficult one. At the heart of this litigation are the Indiana franchise laws — legislation that has been subject to little relevant interpretation by the Indiana courts. This statutory scheme is important to the State of Indiana. It embodies crucial policy choices affirmatively made by the legislature in an effort to balance, in a way that makes sense in the commercial and social life of Indiana, the freedom to enter into contracts and the need to regulate the practices of the franchise industry. In undertaking the task of deciding this appeal, the court resolves definitively two issues of statutory interpretation: (1) whether the Indiana franchise laws would recognize the choice of law clause in the contract; (2) whether "good cause" in the statutory scheme refers only to problems with the performance of the franchisee. With respect to both questions, the court does not have, as it never has when it deals with Indiana law, the assistance of legislative history. Nor does it have any significant judicial interpretation from the Indiana courts. It must therefore turn to analytical tools that are far less precise — reliance on bits and pieces of statutory language, analogous case law from other jurisdictions, and the pronouncements of United States district judges sitting in the State of Indiana.77
All of these devices are legitimate tools of the jurist faced with the task of dealing with the black hole of legislative ambiguity. Indeed, they are often the only tools available. However, they do have their distinct infirmities. The perils of relying on bits and pieces of statutory language cut adrift from their moorings in the statute are well known and need little elaboration here. Reasoning by analogy to the case law developed in other jurisdictions is perilous because we do not know whether those jurisdictions made the same policy choices as did Indiana.78
It certainly is appropriate to give significant weight to the views of our colleagues on the district bench in Indiana. See PPG Indus., Inc. v. Russell, 887 F.2d 820, 823 (7th Cir.1989). We must remember, however, that at times this practice amounts to the blind leading the blind. For reasons not entirely clear to me, Indiana has not given federal district courts within the state the power to certify questions of state law to the Indiana courts and, consequently, the judges of those courts must do the best they can without such assistance.  The majority appears to recognize the hazards of depending on the pronouncements of district judges under these circumstances because, while relying on such a methodology with respect to the choice of law question (despite the uncertainty as to how all the district judges who have ruled on the matter would decide the issue before us), the majority pointedly declines to follow the district court's interpretation of the statute with respect to the good cause termination argument.79
If the court had used all the tools at its disposal, one might have to conclude that, while the issues are indeed close calls, the court had done all that it could with the materials at hand. However, unlike our colleagues in the district court, we can do more. Indeed, there are very clear signs that the legislature of Indiana, and, by their passage of a constitutional amendment, the people of Indiana, would like us to do more. By two separate provisions of law, Indiana has made it clear that it very much cares that ambiguities in the law of the state be clarified on a regular basis by the supreme court of the state. The legislature has enacted a statute that permits this court to certify a controlling question of state law to the Supreme Court of Indiana. More recently, the constitution of the state has been amended to ensure that the Supreme Court of Indiana has sufficient control of its own docket to permit it to spend the time needed to clarify important points of state law in civil litigation.80
Of course, we cannot — and indeed should not — certify every issue on which there is some ambiguity. After all, the constitution gives us independent responsibility for the adjudication of cases properly within our diversity jurisdiction. Moreover, we must be respectful of the workload of our colleagues in the state courts. Nevertheless, despite these considerations, we must balance these concerns against the manifest concern of Indiana that it be allowed to develop its own jurisprudence. A good starting point in striking that balance would be to identify those areas of state jurisprudence where there is a particular need or manifest state interest in controlling the development of the law. We also ought to attempt to identify those areas where the very nature of the litigation makes it evident that a good number of the cases will be brought in the federal courts and where, unless certification is used to resolve major issues, the federal courts, simply by virtue of the choice of forum, will have a virtual monopoly over the development of the law in that field. When these two concerns are present, there is an especially good case for certification.81
Such a situation exists in the present case. We are not dealing here with some esoteric, nonrecurring question of common law. Rather, we are dealing with the interpretation of a statutory scheme enacted by the state legislature to deal with an important area of commerce that has been the scene in modern of times of much abuse and where the need for a careful balance between freedom of contract and governmental regulation is particularly acute. It is also an area where the very nature of the litigation — often involving national franchisors and local franchisees and significant  amounts of money — makes diversity jurisdiction quite probable. Under these circumstances, certification of the controlling points of law is, in my view, the appropriate course. Accordingly, I respectfully dissent.82
 No Indiana court has applied a contractual choice of law provision to an entity that would, under Indiana law, qualify as a franchise. Two federal district courts (other than the district court in this case), sitting in diversity, have considered the issue. In Sheldon v. Munford, Inc., 660 F.Supp. 130 (N.D.Ind.1987), the court held that the contractual choice of Georgia law controlled because Indiana did not have a public policy against the contractual provisions at issue, namely exclusive territory and noncompetitor-franchisor clauses and, therefore, these issues were issues where the choice of law could be chosen by contract. Unlike Sheldon,the provisions of the contract at issue here are potentially in violation of Indiana public policy; renewal without good cause violates IND.CODE § 23-2-2.7-1(7) which requires good cause for termination of a franchise, and a unilateral change of credit terms violates IND.CODE § 23-2-2.7-2(2).83
In Sullivan v. Savin Business Machines, Corp., 560 F.Supp. 938 (N.D.Ind.1983), the plaintiff alleged that the agreement was an adhesion contract and, therefore, the choice of law provisions were void. The court held that the parties were of equal bargaining power so the agreement was not an adhesion contract and consequently it applied the contractual choice of law. Sullivan is not apposite because the plaintiff in that case did not claim that the contract was in violation of Indiana public policy but rather claimed that the contract was an adhesion contract. While the contract in the present case is most likely not an adhesion contract (this issue is not before us), other Indiana public policies not considered in Sullivan, such as those concerning unilateral termination of contracts, are at issue here. Consequently, neither of these cases provide influential precedent on the issue before us.84
South Bend Consumer's Club v. United Consumer's Club, 572 F.Supp. 209, 214 (N.D.Ind.1983) is closer to the case at hand. In South Bend Consumer's Club the district court applied Indiana law despite a contractual choice of Illinois law because Indiana had a public policy against restrictive covenants. The court held that, as evidenced by Indiana statutes, the policy of Indiana was opposed to the enforcement of the covenant at issue and therefore, the parties could not contractually choose Illinois law.85
 Application of Indiana franchise law to control who sells copiers in other states may present difficulties under the commerce clause. See Healy v. Beer Institute, Inc., ___ U.S. ___, 109 S.Ct. 2491, 2497, 105 L.Ed.2d 275 (1989) ("the `Commerce Clause ... precludes the application of a state statute to commerce that takes place wholly outside of the State's borders, whether or not the commerce has effects within the State.'") (citations omitted). It may be the case the Wright-Moore's incorporation and principal place of business in Indiana give Indiana sufficient connection to all products sold by Wright-Moore to apply its own law. The import of the commerce clause on the application of Indiana law, however, was not considered by the district court and was not fully briefed here. Consequently, we reserve this issue for another day when it is more squarely presented.86
Specifically § 23-2-2.5-1(a) provides that a "`franchise' means a contract by which:87
(1) a franchisee is granted the right to engage in the business of dispensing goods or services, under a marketing plan or system prescribed in substantial part by a franchisor;88
(2) the operation of the franchisee's business pursuant to such a plan is substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and89
(3) the person granted the right to engage in this business is required to pay a franchise fee."90
 In Medina & Medina v. Country Pride Foods, LTD., 858 F.2d 817 (1st Cir.1988), a case not cited by either party or the district court, the Puerto Rican Supreme Court, on a certified question from the First Circuit, held that good faith withdrawal from the market did not violate the Puerto Rican franchise act. Medina deals with the special situation where the franchisor completely withdraws from the market. This situation is unique because there is a small chance that the franchisor is acting opportunistically when completely withdrawing from the market. Since the franchise statutes require fair dealing and market withdrawals carry little chance of unfair dealing, courts have considered market withdrawals to constitute good cause. This position is reflected in Remus, 794 F.2d at 1240-41, where we held that the Wisconsin statute allows termination only based on behavior of the franchisee and yet we specifically reserved the question of whether market withdrawal is good cause. Medina, therefore, is not directly relevant to the issue before us. Ricoh did not withdraw from the market; it simply changed distribution systems. On its facts, our case is closer to Kealey, 761 F.2d at 350, where Walgreen attempted to replace its franchisee with Walgreen-owned stores, than it is to Medina. Market withdrawal is not before us and we leave this issue for another case.91
 It should be cautioned that the requirement of a similarly situated party does not carry over to all areas of law where discrimination is prohibited. For example, a minority employee who is terminated because of minority status is discriminated against even when there is no similarly situated person. The discrimination provision in this statute, however, makes it unlawful for the franchisor to "discriminat[e] unfairly among its franchisees ..." IND.CODE § 23-2-2.7-2(5). This language indicates the necessity of a similarly situated franchisee. The situation analogous to a lone minority employee is where a single franchise is terminated for an unlawful reason and this situation falls under the good cause requirement.92
 We do not analyze this or the remaining claims under New York law as Wright-Moore alleges that Indiana law applies and Ricoh agreed to assume that Indiana law applies to these claims for the purposes of appeal.93
 We do not reach the cross-appeal's change of venue claim. It was not considered by the court below and is not appropriately considered for the first time on appeal. In addition, in light of our remand, we do not reach Wright-Moore's punitive damage claim.94
 As a practical matter, this process of reasoning by analogy often is flawed by overdependence on the law of other jurisdictions within the circuit. This overdependence is quite natural because the circuit judges are more familiar with the law of the other states within their circuit. However, we must acknowledge that, as Justice Schaefer of the Illinois Supreme Court pointedly reminded us, "[t]here is no element of sovereignty in a federal judicial circuit." Schaefer, Reducing Circuit Conflicts, 69 A.B.A. J. 452, 454 (April 1983). It is simply an administrative subdivision of the federal judiciary. A state within the circuit need not see policy matters the same way as the other states grouped together by the Congress for the purpose of administering federal law. We must be careful not to permit our dependence on analogous sources of interpretation to result in a "law of the circuit" with respect to a matter of state law. See Chang v. Michiana Telecasting Corp., 900 F.2d 1085, 1087 (7th Cir.1990) ("We certify questions to ensure that `the law we apply is genuinely state law, and not a federal court's perception of what state judges ought to hold.'") (quoting Covalt v. Carey Canada Inc., 860 F.2d 1434, 1441 (7th Cir.1988)) (emphasis supplied by Covalt court).95
 See Ind.Code Ann. § 33-2-4-1 (providing statutory authorization for the Supreme Court of Indiana to answer certified questions from the Supreme Court of the United States, any United States circuit court of appeals, and the court of appeals of the District of Columbia, but omitting any reference to the United States district courts); Indiana Rule of Appellate Procedure 15(O) (incorporating the statutory authorization).96
 See cases cited supra, p. 133, note 1. To the degree these cases exhibit differing views among the district judges of Indiana, the case for certification is indeed stronger.97
 See supra note 2.98
 See Ind. Const. art. 7, § 4 (West Supp.1989) (before the 1988 amendment to this section, the appellate jurisdiction of the Supreme Court of Indiana extended to criminal cases in which a sentence of greater than ten years was imposed; the section as amended reduces the scope of appellate jurisdiction to cases in which a sentence of greater than fifty years was imposed.99
 Cf. Covalt v. Carey Canada Inc., 860 F.2d 1434, 1440 (7th Cir.1988) (issue concerning the interplay between a "discovery rule" of limitations for disease based tort actions and Indiana's ten year statute of repose was certified to the Indiana Supreme Court in a situation where the law of asbestos litigation in Indiana had been developed exclusively through federal diversity cases).
Supreme Court of Alabama.
 Victor T. Hudson and William W. Watts III of Reams, Vollmer, Phillips, Killion, Brooks & Schell, Mobile, for appellant/cross appellee.7
Steve Olen and George W. Finkbohner III of Finkbohner, Lawler & Olen, Mobile, for appellee/cross-appellant.8
The accounting firm of Cherry, Bekaert & Holland, (hereinafter "CB & H"), appeals from the trial court's summary judgment in favor of J. Charles Brown in his action for a judgment declaring that paragraph 15.9 of the CB & H partnership agreement entered into by Brown after he began work with CB & H constituted an unenforceable covenant not to compete under Alabama law. Brown cross-appeals from the trial court's entry of summary judgment in favor of CB & H on his claim that CB & H had tortiously interfered with his business. We affirm.10
In 1979, Brown became a partner in CB & H's Mobile, Alabama, office. In 1980, he was made an equity partner in CB & H, and he executed CB & H's partnership agreement in 1981. Article 15 of the partnership agreement contained the following paragraphs relevant to this appeal:11
"15.8 For a period of three (3) years after the termination of his relationship with the partnership, the withdrawing or expelled partner will neither, for himself or any other accountant, solicit or perform any bookkeeping, auditing, accounting, tax consultant work, or accounting services of any other kind, either on his own account or for any other person, firm, or corporation in any capacity or relationship, within a ten (10) mile radius of the Cherry, Bekaert & Holland office in which such withdrawing or expelled partner was last stationed, except that there shall be no geographic restriction on a partner expelled without cause pursuant to Section 15.2 above, nor will he solicit or perform such accounting services for himself or any other accountant, from or for any client of the partnership without prior written consent of the Executive Board....12
"15.9 In the event that a court of competent jurisdiction shall determine that the covenant not to compete contained in Paragraph 15.8 is invalid with respect to a withdrawing or expelled partner, it being agreed that within the State of Alabama the courts have determined that such a covenant is invalid, then, in that event, a withdrawing or expelled partner shall not be subject to the above covenant not to compete but shall be subject to the buy/sell agreement embodied in this paragraph.... In either event, said withdrawing or expelled partner shall pay to the partnership,  for the purchase of any client served (as defined in Paragraph 15.8 above) by said partner within a three (3) year period following the termination of his relationship with the partnership, an amount not less than one hundred fifty percent (150%) of the fees charged said client by the partnership during the last twelve (12) month period during which the partnership served said client prior to said client being served by the said partner plus an amount representing the excess, if any, of the fees charged by the said partner for the twelve (12) month period commencing with the time said partner first served said client over the fees charged by the partnership referred to above."13
Brown signed the agreement in Mobile and sent it to CB & H's main office in Charlotte, North Carolina, to be executed by the managing partner. The agreement then became effective on January 14, 1981, after it was signed by the managing partner. The agreement also specified that the parties agreed that it was made in North Carolina and that its validity and construction were governed by North Carolina law.14
In January 1988, Brown withdrew from CB & H. Some of the clients Brown served while working for CB & H retained him after he left CB & H. On March 15, 1989, CB & H sued Brown in North Carolina, seeking $259,801.50, an accounting, and specific enforcement of paragraph 15.9 of the partnership agreement. CB & H alleged that Brown took 100 CB & H clients when he left the partnership, without paying for them. On May 18, 1989, Brown sued in Mobile Circuit Court, alleging tortious interference with his business and seeking a judgment declaring that paragraph 15.9 of the CB & H partnership agreement was a covenant not to compete—a restraint of trade—and was void and unenforceable under Alabama Code 1975, § 8-1-1. On August 2, 1989, Brown filed a motion for a summary judgment on his claim that paragraph 15.9 was void under Alabama law. CB & H filed a motion to dismiss the Alabama proceeding for lack of subject matter jurisdiction, based on the prior pending suit in North Carolina. On February 21, 1990, the trial court entered a summary judgment in favor of Brown on his claim that paragraph 15.9 was void under Alabama law as a covenant not to compete. The trial court also denied CB & H's motion to dismiss for lack of subject matter jurisdiction, but entered a judgment in favor of CB & H on Brown's allegation of tortious interference with his business.15
CB & H appeals that portion of the summary judgment declaring that paragraph 15.9 constitutes a covenant not to compete and denying CB & H's motion to dismiss. Brown cross-appeals from the judgment in favor of CB & H on his claim of tortious interference with business. CB & H raises the following issues for our review: (1) whether the trial court lacked subject matter jurisdiction over a declaratory judgment action filed subsequent to the filing of the North Carolina action at law involving the same parties and the same issues; (2) whether the validity of paragraph 15.9 under Alabama law was a moot question—not properly the subject of declaratory relief; i.e., whether North Carolina law would govern the validity of the provision in the North Carolina proceedings; (3) whether, the requested declaratory relief was furthermore moot on the grounds that, under Alabama choice of law principles, North Carolina law governed the validity of an agreement to pay money that was made in North Carolina and that made the money payable to a North Carolina partnership; and (4) whether an agreement by a withdrawing accountant to purchase any clients of his former partnership that he elects to continue to serve is an unenforceable covenant not to compete under Ala.Code 1975, § 8-1-1(a). On his cross-appeal, Brown raises the issue of whether the trial court erred in entering a judgment in favor of CB & H on his claim of tortious interference with business; he argues that there was no motion or pleading before the court upon which to base such a ruling.16
CB & H first argues that the trial court lacked subject matter jurisdiction over this action because of the prior pending action in North Carolina involving the  same parties and the same issues. CB & H's argument on this point is unpersuasive. While it is true that CB & H filed an action in North Carolina prior to Brown's action in Alabama, the mere fact that there is a prior pending action in another state does not divest the trial court of subject matter jurisdiction. In Galbreath v. Scott, 433 So.2d 454 (Ala.1983), this Court addressed a similar situation of a prior suit pending in another state. Finding that the prior suit, filed in Florida and involving the same parties and the same issues, did not bar a subsequently filed suit in Alabama, the Court stated:17
"`The mere pendency of an action in one state has no effect upon the right to bring an action in another. Whichever suit is first carried to judgment then bars the other, but it is only the rendition of judgment which has that effect. Until judgment is rendered, successive suits may be brought on the same cause of action in a dozen different states. While rendition of judgment on a prior judgment from another state as a cause of action does not discharge the prior judgment by merger or otherwise, the satisfaction of either judgment will discharge both.'"18
Galbreath, 433 So.2d at 456 (quoting R. LeFlar, American Conflicts Law § 75 (3d ed. 1977). In the present case, CB & H's prior suit is still pending in North Carolina, as no judgment has been rendered in it. Thus, the prior pending suit in North Carolina has no effect on Brown's right to bring suit in Alabama, and the trial court properly retained jurisdiction over the action.19
Having concluded that the trial court did have jurisdiction over Brown's suit, we must now focus on CB & H's partnership agreement, specifically paragraph 15.9. Although CB & H raises several issues related to paragraph 15.9 for our review, the essential question we must resolve is whether paragraph 15.9 is a covenant not to compete and whether it is enforceable under applicable Alabama law. We begin our analysis with Ala.Code 1975, § 8-1-1, the relevant statute concerning covenants not to compete. Section 8-1-1 provides:20
"(a) Every contract by which anyone is restrained from exercising a lawful profession, trade or business of any kind otherwise than is provided by this section is to that extent void.21
"(b) One who sells the good will of a business may agree with the buyer and one who is employed as an agent, servant or employee may agree with his employer to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a specified county, city or part thereof so long as the buyer, or any person deriving title to the good will from him, or employer carries on a like business therein.22
"(c) Upon or in anticipation of a dissolution of the partnership, partners may agree that none of them will carry on a similar business within the same county, city or town, or within a specified part thereof, where the partnership business has been transacted."23
Subsection (a) provides the general prohibition of covenants not to compete and expressly applies to professionals. Subsections (b) and (c) provide limited exceptions to the general prohibition in subsection (a). However, these exceptions do not apply to professionals. Thompson v. Wiik, Reimer & Sweet, 391 So.2d 1016 (Ala.1980); Odess v. Taylor, 282 Ala. 389, 211 So.2d 805 (1968). Because the present case involves a professional, an accountant, the exceptions contained in subsections (b) and (c) do not apply, and we are left with the general prohibition of covenants not to compete. See Mann v. Cherry, Bekaert & Holland, 414 So.2d 921 (Ala.1982); Thompson v. Wiik, Reimer & Sweet, 391 So.2d 1016 (Ala.1980); Gant v. Warr, 286 Ala. 387, 240 So.2d 353 (1970). It is in light of this policy disfavoring covenants not to compete embodied in § 8-1-1 that we must view paragraph 15.9 of the CB & H partnership agreement.24
CB & H stipulates that paragraph 15.8 contains a covenant not to compete, but it maintains that paragraph 15.9 is an alternative  to 15.8 and is merely a "buy/sell" agreement, which, by its terms, becomes effective only upon the determination by a court of competent jurisdiction that 15.8 is void and unenforceable as a covenant not to compete. CB & H also recognizes in paragraph 15.9 the Alabama policy disfavoring such covenants. These two paragraphs presumably ensure CB & H that it will be able to enforce one of the two provisions against the withdrawing partner in every state, regardless of a particular state's laws concerning covenants not to compete.25
While paragraph 15.9 does not explicitly contain a covenant not to compete, the requirements of the paragraph are tantamount to a covenant not to compete and operate in the same manner. Paragraph 15.9 requires that the withdrawing partner purchase any former CB & H client he serves within a 3-year period following his withdrawal from the partnership for an amount equal to 150% of the fees charged to the client by CB & H during the last 12-month period when CB & H served the client. The withdrawing partner must also pay to CB & H the excess of any fees charged by him to the former CB & H client over the fees charged to that client by CB & H. Paragraph 15.9 is clearly an attempt by CB & H to subvert and circumvent the laws and policies of Alabama regarding covenants not to compete. CB & H's attempt to validate this paragraph by admitting that paragraph 15.8 contains the covenant not to compete and recognizing its unenforceability under Alabama law and phrasing 15.9 as a "buy/sell agreement" falls far short. The "purchase" requirements placed on a withdrawing partner by paragraph 15.9 operate as a harsher form of restraint on the practice of accounting than paragraph 15.8. Although paragraph 15.9 does not restrict the practice of accounting on a geographic basis, as in 15.8, it restricts that practice on a much broader monetary basis. The requirements of 15.9 are so harsh and punitive in nature that they virtually operate to prevent the practice of accounting by the withdrawing partner totally. We agree with the trial court's determination that paragraph 15.9 is a covenant not to compete, and, as such, is void and unenforceable under Alabama law. This determination does not, however, end our inquiry into paragraph 15.9. The question now becomes whether to give effect to the parties' choice of North Carolina law to govern this agreement.26
CB & H argues that Brown's declaratory judgment action raises a moot question because, it says, North Carolina law governs the construction and validity of the partnership agreement and Brown's requested relief is further moot because, it says, Alabama's choice of law principles require the application of North Carolina law to this agreement. We conclude, however, that CB & H has misstated the law on this point.27
The partnership agreement specifies that the parties agree that North Carolina law will govern the construction and validity of the agreement. Alabama follows the principle of "lex loci contractus," which states that a contract is governed by the laws of the state where it is made except where the parties have legally contracted with reference to the laws of another jurisdiction. Macey v. Crum, 249 Ala. 249, 30 So.2d 666 (1947); J.R. Watkins Co. v. Hill, 214 Ala. 507, 108 So. 244 (1926). Alabama law has long recognized the right of parties to an agreement to choose a particular state's laws to govern an agreement. Craig v. Bemis Co., 517 F.2d 677 (5th Cir.1975). Thus, North Carolina law would seem to govern the present agreement, because CB & H and Brown have apparently chosen the laws of North Carolina to govern it. However, this principle is qualified by the principles set out in Blalock v. Perfect Subscription Co., 458 F.Supp. 123 (S.D.Ala. 1978), and the cases following it.28
In Blalock, although the parties to an agreement, which contained a covenant not to compete, chose Pennsylvania law (which enforces covenants not to compete) to govern the agreement, the United States District Court for the Southern District of Alabama held that where the parties' choice of law would be contrary to the fundamental public policies of the forum state, Alabama, the parties' choice of law  could not be given effect and that the laws of the forum must control the agreement. That case involved a contract between an Alabama resident and a Pennsylvania corporation. The Blalock court referred to the Restatement Second of Conflict of Laws, §§ 187 and 188 for guidance. Section 187 provides, in part:29
"(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.30
"(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either31
"(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or32
"(b) application of the law of the above chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties."33
Comment (g) to § 187 states further:34
"Fulfillment of the parties' expectations is not the only value in contract law; regard must also be had for state interests and for state regulation. The chosen law should not be applied without regard for the interests of the state which would be the state of the applicable law with respect to the particular issue involved in the absence of an effective choice by the parties. The forum will not refrain from applying the chosen law merely because this would lead to a different result than would be obtained under the local law of the state of the otherwise applicable law. Application of the chosen law will be refused only (1) to protect a fundamental policy of the state which, under the rule of § 188, would be the state of the otherwise applicable law, provided (2) that this state has a materially greater interest in the determination of the particular issue."35
The comments to § 187 also provide that in order for a policy to be considered fundamental it must be "a substantial one" and "may be embodied in a statute which makes one or more kinds of contracts illegal or which is designed to protect a person against the oppressive use of superior bargaining power." The Blalock court went on to hold that because the covenant not to compete, which would be enforced under Pennsylvania law, "flies directly in the face of the public policy of Alabama as set out by statute," the parties' choice of law could not be given effect, and the law of Alabama, namely § 8-1-1, governed the agreement. See also Hughes Associates, Inc. v. Printed Circuit Corp., 631 F.Supp. 851 (N.D.Ala.1986).36
We are faced with a similar situation here. While parties normally are allowed to choose another state's laws to govern an agreement, where application of that other state's laws would be contrary to Alabama policy, the parties' choice of law will not be given effect and Alabama law will govern the agreement. In this case, because the parties have chosen North Carolina law to govern the agreement and North Carolina law would enforce the covenant not to compete set out in paragraphs 15.8 and 15.9, the parties' choice of law must fall. This Court finds that Alabama's policy against covenants not to compete is a fundamental public policy; that Alabama law would be applicable but for the parties' choice of North Carolina law; and that Alabama has a materially greater interest than North Carolina in the determination of this issue, because CB & H is attempting to enforce a covenant not to compete in Alabama and against an Alabama resident. Furthermore, application of North Carolina law, enforcing the covenant not to compete, clearly "flies directly in the face of the public policy of Alabama." Blalock, 458 F.Supp. at 127. Therefore, we hold that the contractual choice of North Carolina  law cannot be given effect and that Alabama law will govern this agreement; therefore, § 8-1-1 is to be enforced. Under that provision, paragraph 15.9 is void and unenforceable and Brown cannot be bound by its terms.37
Brown cross-appeals, arguing that the trial court erroneously entered the judgment in favor of CB & H dismissing his claim alleging tortious interference with business. We disagree.38
Brown alleged in his complaint that CB & H, through its attempt to enforce paragraph 15.9 of the partnership agreement, tortiously interfered with his business relations and sought to restrain his practice of accounting. Tortious interference with business requires that the plaintiff prove: "(1) The existence of a contract or relation; (2) defendant's knowledge of the contract or business relation; (3) intentional interference by the defendant with the contract or business relation; and (4) damage to the plaintiff as a result of defendant's interference." Lowder Realty, Inc. v. Odom, 495 So.2d 23, 25 (Ala.1986). See also Gross v. Lowder Realty, 494 So.2d 590 (Ala.1986). After examining the record, we conclude that Brown offered no proof of any intentional interference by CB & H with his business relations. CB & H merely attempted to enforce the partnership agreement, but did not engage in any activity that would amount to intentional interference. The trial court correctly entered a judgment in favor of CB & H on Brown's claim of tortious interference with business.39
For the reasons stated in this opinion, the judgment of the trial court is affirmed.40
Court of Appeals of California, First District, Division Three.
Thelen, Marrin, Johnson & Bridges, Charles S. Birenbaum and Thomas M. McInerey for Defendant and Appellant.8
Stephen E. Taylor, Jan J. Klohonatz and Paul Beach for Plaintiffs and Respondents.9
The Hunter Group, Inc. (Hunter or appellant), timely appeals from a judgment by which the San Francisco Superior Court declared that covenants not to compete contained in the employment contracts of Hunter consultants who do not reside in California are illegal in the circumstances of this case, and cannot be enforced against respondents The Application Group, Inc. (AGI), a California-based corporation, and Dianne Pike (Pike), a resident of Maryland and former Hunter consultant who was recruited to work for AGI in California in 1992. The trial court's judgment  was based on sections 16600 and 17200 of the California Business and Professions Code.12
On appeal, Hunter contends: (1) There is no "actual controversy" between or among the parties and, therefore, certain of AGI's and Pike's claims for declaratory and injunctive relief are not justiciable; (2) the enforceability of the relevant covenants not to compete must be determined under the law of Maryland, not California; and (3) under Maryland law, the covenants not to compete are lawful and enforceable.13
We conclude the trial court did not abuse its discretion in determining that AGI's claims are justiciable. We further conclude, in agreement with the trial court, that California law may be applied to determine the enforceability of a covenant not to compete, in an employment agreement between an employee who is not a resident of California and an employer whose business is based outside of California, when a California-based employer seeks to recruit or hire the nonresident for employment in California. However, we agree with Hunter that the trial court abused its discretion by granting declaratory relief in favor of Pike, whose individual claims became moot during the pendency of the proceedings below. Accordingly, we vacate those portions of the judgment relating to Pike's individual claims for relief. As thus modified, the judgment will be affirmed.14
Hunter is a privately held Maryland corporation, with its headquarters in Maryland. It provides computer consulting services for businesses that use human resources software, including software manufactured by the California-based company, PeopleSoft, Inc. Hunter maintains a branch office in San Francisco, California, as well as in Georgia, Illinois, New York, and Massachusetts. Hunter frequently competes with AGI and other California-based companies for consulting projects. Although its business is centered primarily in the eastern United States, Hunter has provided and continues to provide consulting services to customers in California.17
Between October 1992 and July 1993, Hunter employed six computer consultants and one administrative assistant who were California residents.  None of these employees had a covenant not to compete in their employment agreements. However, all of Hunter's employees who reside outside of California and work primarily in other states do so under covenants not to compete, which prevent them from working for any of Hunter's competitors for up to one year from termination unless the employee is laid off for economic reasons.18
Between August 1993 and May 1994, Hunter performed no billable work in California. However, in 1994, Hunter again attempted to enter the California computer consulting market. By late 1994, Hunter had ninety employees nationwide, only two of whom resided in California, and five California-based customers. At this time, too, the employment agreements of all of Hunter's non-California resident employees contained covenants not to compete, but those of the two California residents did not. To increase its capacity in California, Hunter assigned temporary projects in California to employees from other states.19
AGI is a California corporation, with its headquarters in San Francisco, California. It is a subsidiary of Automatic Data Processing, a publicly held corporation, and maintains offices in Georgia, Illinois, and New Jersey. Like Hunter, AGI provides its customers with the services of trained, specialized computer consultants who frequently travel substantial distances to work directly at the customer's premises. Sometimes these consultants travel from their home state to the customer's location for a project of extended duration. Competition for the limited number of qualified computer consultants among prospective employers — including Hunter and AGI — is "stiff." As of the end of 1994, AGI employed 106 consultants nationwide, 30 of them in California.20
AGI and Hunter are structured differently and manage their employees in different ways. AGI conducts both its in-state and out-of-state business from its San Francisco headquarters. AGI's employees are treated as California employees; all AGI employees are residents of, work in, or are managed from California, and, with one exception, have employment agreements governed by California law. Unlike Hunter, AGI does not vary the terms of its employment agreements depending upon the employee's state of residence. AGI does not require a covenant forbidding employment with its competitors.21
Pike is a consultant who is skilled in computerized human resources management systems, the field in which Hunter and AGI compete. She has  been a resident of Maryland since 1963, and was hired by Hunter in 1991. During the 16 months she was employed by Hunter, Pike worked at Hunter's Baltimore offices and at various customer sites in Arizona, Colorado, Massachusetts, and New York. It is undisputed that Pike never set foot in California, even for pleasure, during the time she was employed by Hunter.22
Hunter objected to AGI's recruitment and hiring of Pike, and demanded she withdraw her resignation and continue service under her employment contract. When Pike refused, Hunter sued her in the Circuit Court for Montgomery County, Maryland, in an action entitled Hunter Group, Inc. v. Pike (No. 95647), for breach of the covenant not to compete contained in her employment agreement. Hunter also sued AGI for unlawful interference with that contractual relationship. That action was concluded in May 1994, following presentation of the plaintiff's case, when the Maryland court granted Pike's and AGI's motion for judgment because of Hunter's failure to present any evidence of damages.23
The covenant not to compete contained in Pike's employment contract is similar to those used by Hunter with respect to all of its employees who may or may not work in, but are not residents of, California. The covenant in Pike's employment contract provided: "During the term of [her] employment, and for a period of [one year] after the date of its termination, [Pike] agrees that [she] will not render, directly or indirectly, any services of an advisory or consulting nature, whether as an employee or otherwise, to any business which is a competitor of [Hunter]." The noncompetition clause does not apply where the employee is "terminated by [Hunter] for economic or budgetary reduction purposes." Pike's employment contract expressly provided it was to be "governed by and construed in accordance with the laws of the State of Maryland."25
Hunter uses the covenant not to compete for the admitted purpose of deterring and preventing the solicitation, recruitment and hiring of Hunter's employees by its competitors, especially those in California. Hunter intends  that the covenant not to compete will serve as a complete barrier between its competitors and all of its employees. Hunter's use of the covenants not to compete also allows it to avoid a "bidding war" that would increase the salary of its consultants. Hunter has admitted its consultants cannot, and do not, shop for a potential offer from a competitor to obtain leverage in salary negotiations with Hunter. Hunter has objected, and continues to object, to what Hunter calls AGI's "poor business practice" of "trying to hire [Hunter's] people and steal them away from all their competitors." Indeed, Hunter's president testified that the covenant not to compete was designed to "scare [AGI] away" from soliciting its employees and that, until the Maryland action, Hunter's strategy had "worked quite well for three years."26
Hunter endeavors to assure the efficacy of its covenant not to compete by repeatedly notifying competitors in California, including AGI, that they are not to solicit, recruit, or hire any Hunter employee in California. For example, in a letter of July 20, 1989, Hunter warned AGI, as follows: "[Y]ou should be aware [Hunter] has secured very strict employment agreements with each staff that disallows working for a competitor company or in a competitive position upon leaving Hunter. We would seek an injunction barring any provision of similar services by Hunter employees hired by [AGI]." Similarly, during the pendency of this action in August 1994, Hunter warned AGI in writing to "cease and desist its solicitation of [Hunter] employees." Hunter's covenant not to compete has, in fact, chilled the interest of Hunter's consultants to seek employment with its competitors, and has chilled AGI's efforts to solicit and recruit such consultants.27
AGI and Pike filed their original verified complaint in San Francisco Superior Court on April 16, 1993, seeking a declaratory judgment that section 16600, and not Maryland law, applied to Pike's covenant not to compete and AGI's recruitment of Pike. At that time the Maryland action was still pending, and Hunter successfully moved the San Francisco court on forum non conveniens grounds for a stay of the action pending completion of Maryland litigation. On January 20, 1994, AGI and Pike jointly filed a verified first amended complaint for declaratory relief.29
In their amended complaint, AGI and Pike first sought a declaration that California law, specifically sections 16600 and 17200, and not Maryland law, applied to Pike's covenant not to compete, and that Hunter would be prohibited from enforcing any judgment obtained in the Maryland action. Second, AGI sought a declaration that these California statutes provided it with a "privilege" to contact and recruit any Hunter consultant, wherever he  or she resided or worked, who was employed under a covenant not to compete. Third, AGI sought a declaration that, by including an illegal noncompetition provision in its employees' contracts, Hunter was engaging in "unfair competition" within the meaning of section 17200. Finally, AGI sought a declaration that, pursuant to sections 16600 and 17200, Hunter was precluded from enforcing in California any out-of-state judgment or injunction it "might obtain" which upholds the validity of its covenant not to compete.30
The parties filed cross-motions for summary judgment or, in the alternative, summary adjudication, in the law and motion department of the San Francisco Superior Court. On December 13, 1994, the Honorable William Cahill issued an order granting AGI's motion in part, ruling as follows: (1) As a matter of law, California law applies to the actions of AGI in calling and recruiting from California, any Hunter consultants or former consultants who have covenants not to compete in their employment contracts. (2) Sections 16600 and 17200 permit AGI to recruit and hire from California any Hunter consultants who are residents of California, and the use by Hunter of covenants not to compete, for such employees, is illegal under sections 16600 and 17200. (3) California law applied to Pike's covenant not to compete, which was "invalid and unenforceable in California" as to her but, in any event, the covenant with Hunter no longer prohibited her from working for AGI. Judge Cahill denied AGI's motion to the extent it sought a declaration that Hunter's covenant is unenforceable against its consultants "who work or have worked in California, or who report to or are managed from, or have reported to or have been managed from, any [Hunter] California office," ruling that "[a] case-by-case evaluation is needed for these individuals." Judge Cahill also ruled that case-by-case evaluation would be necessary for any out-of-state judgment or injunction against AGI because of its recruitment or hiring of a Hunter employee who has a covenant not to compete. Finally, Judge Cahill declined to recognize a "privilege," based on sections 16600 and 17200, in favor of AGI.32
The balance of the case proceeded to trial in January 1995 before the Honorable Roy Norman, an assigned judge. The matter was submitted after a half-day of live testimony by AGI's president, William Campbell, and the filing of a stipulated statement of facts.33
On January 30, 1995, Judge Norman issued a statement of decision, denying AGI's claims for declaratory relief. However, on April 5, 1995,  in response to AGI's objections to the proposed statement of decision, Judge Norman issued a revised statement of decision which, for the most part, adopted the rationale of Judge Cahill's prior ruling. Judge Norman also ruled — for the first time — that Hunter's covenant not to compete is an "unenforceable contract to restrain trade," the use of which constitutes "unfair competition" in violation of section 17200. More specifically, in his final statement of decision, Judge Norman ruled that AGI was entitled to a declaratory judgment, as follows:34
"1. California law applies to [AGI's] hiring of [Hunter] employees to engage in a profession or business in California. The reason is that California has a strong public policy concerning contracts which would prohibit employment in California regardless of where the parties exchanged promises. The fact that [AGI] does the hiring itself from California is not an operative fact. The operative fact is that California is precluded from the benefits of a business or profession by contract.35
"2. Sections 16600 and 17200 of the Business and Professions Code respectively do not confer a privilege. The former deprives certain contract provisions of legal recognition. The latter is a definition. Each separate [sic] and in combination are limitations on conduct to promote public policy. Under Section 17203, [AGI] is given the privilege of enforcing that public policy in its own interest to prevent its breach. The effect of Business and Professions Code section 16600 can be imagined to be an addendum to [Hunter's] non-compete clause to add the words `void in California.' That neither gives the privilege to recruit or hire, it simply renders that promise unenforceable in California.36
"3. With respect to [Hunter] employees who work or have worked or who report to or are managed from [Hunter's] California office, neither Business and Professions Code sections 16600 or 17200 state or imply that, foreign contracts valid where made, are vitiated by engaging in business in California. California's concern is to prevent the offending term from enforcement to the detriment of its citizens. The operative fact is not its offensive language but its offensive effect. [¶] [AGI's] recruitment efforts to secure employees for employment in California are protected indirectly by invalidating employment contracts which seek to preclude acceptance of such offers. Such efforts are not dependent on the employee's domicile nor his contacts with California. On the other hand, [AGI's] recruitment for employment beyond the borders of California are not brought under California law so as to apply California employment restrictions of Business and Professions Code section 16600 simply because that party has California connections.37
 "4. [Hunter] is bound by California law only to the extent that its consultants are free from the stricture against employment by a competitor in a business to be performed in California. This is so without reference to present residence or employment location and whether or not the employee has engaged in any of [Hunter's] business in California.38
"5. No controversy exists at this time with regard to an existing out-of-state injunction or judgment against [AGI] enforcing [Hunter's] non-compete provision. The Court therefore declines to make any declaration with respect to such injunctions or judgments.39
"6. The Court declines to render declaratory relief as specifically requested in paragraphs 50-52 and 55-57[] of the First Amended Verified Complaint since these paragraphs, as specifically worded, are inconsistent with the law of California as this Court understands it to be and as stated herein."40
Finally, Judge Norman was careful to add that the revised statement of decision, filed April 5, 1995, superseded his prior statement of decision, and that it was not intended to modify, vacate or change Judge Cahill's orders of December 13, 1994, and January 30, 1995, on the parties' cross-motions for summary judgment and summary adjudication of issues. On June 15, 1995,  judgment was entered based on Judge Norman's revised statement of decision and Judge Cahill's orders. Hunter timely filed a "Notice of Partial Appeal," specifying portions of this judgment.41
This appeal raises one of the many interesting and difficult legal questions created by the rapid expansion of computer technology. It involves what might be called the "virtual employer," one whose employees work out of their homes, or from branch offices scattered throughout the country, or at customer sites in various states, as necessary to provide "consulting" services with respect to the customers' computerized human resources systems. Competition among such employers is fierce, both for customers and for qualified employees. The situation gives rise to potential conflicts among the laws governing solicitation, recruitment, and employment in the various states where the employees, employers and customers can be said to "reside."43
In this case, we must decide whether California law may be applied to determine the enforceability of a covenant not to compete, in an employment agreement between an employee who is not a resident of California and an employer whose business is based outside of California, when a California-based employer seeks to recruit or hire the nonresident for employment in California. Before proceeding to the merits of the parties' dispute on that issue, however, we must address a few preliminary questions.44
(1a) Hunter contends that certain of AGI's claims about the enforceability of its covenants not to compete are not justiciable. Specifically, Hunter challenges those portions of the declaratory judgment relating to Hunter consultants who are residents of California, contending they reflect a decision on issues as to which there was and is no "actual controversy." Hunter also contends that Pike's individual claims are moot.46
(2) Code of Civil Procedure section 1060 confers standing upon "[a]ny person interested under a ... contract" to bring an action for declaratory relief "in cases of actual controversy relating to the legal rights and duties of the respective parties." "Whether a determination is proper in an action for declaratory relief is a matter within the trial court's discretion ... and the  court's decision to grant or deny relief will not be disturbed on appeal unless it be clearly shown ... that the discretion was abused." (Hannula v. Hacienda Homes (1949) 34 Cal.2d 442, 448 [211 P.2d 302, 19 A.L.R.2d 1268]; see also General of America Ins. Co. v. Lilly (1968) 258 Cal. App.2d 465, 471 [65 Cal. Rptr. 750].) Whether an action is justiciable for purposes of Code of Civil Procedure section 1060 is also a matter entrusted to the sound discretion of the trial court. (See Tehachapi-Cummings County Water Dist. v. Armstrong (1975) 49 Cal. App.3d 992, 998 [122 Cal. Rptr. 918].) (1b) In this case, we conclude the trial court did not abuse its discretion either by finding AGI's claims to be justiciable, or by granting declaratory relief in AGI's favor.47
Hunter does not appear to challenge AGI's standing as a "person interested under" the noncompetition agreement. Nor does Hunter raise any issue about the justiciability of the parties' dispute about the enforceability of covenants not to compete in the employment agreements of its nonresident employees. Hunter simply contends that any controversy over the use of covenants not to compete for its employees residing in California is purely "conjectural" because, as a matter of corporate policy, Hunter never has and never will include a noncompetition clause in the employment agreements of its employees who reside in California.48
In this regard, Hunter's justiciability argument is beside the point. It is true that Hunter never really disputed and, indeed, conceded it cannot lawfully require a covenant not to compete in the employment agreement of any employee who is a California resident. Ordinarily, declaratory relief would be inappropriate in such a situation. (See Auberry Union School Dist. v. Rafferty (1964) 226 Cal. App.2d 599, 602-603 [38 Cal. Rptr. 223].) However, in this case, it was necessary for the trial court to determine as a  preliminary matter whether the particular noncompetition clause used by Hunter would be enforceable if required of California employees. If so, there would have been no need to decide the central issue raised by AGI's and Pike's complaint: Whether the covenant is enforceable with respect to Hunter's nonresident employees who — like Pike — maintain their foreign domicile, but seek to engage in a business or profession in California. (§ 16600.) That the trial court chose to articulate a logical premise of its declaratory judgment was not error.49
As to Hunter's mootness argument, it is true the one-year term stated in Pike's covenant had expired, and final judgment had been entered in her favor in the Maryland lawsuit, by the time the summary judgment proceedings commenced below. There is nothing to indicate that Pike faces any further liability under her noncompetition pledge, or that she is interested in becoming reemployed by Hunter (or by any other out-of-state company that requires covenants not to compete from its consultants) any time in the near future. Thus, as Hunter contends, Pike's individual claims for declaratory relief under Code of Civil Procedure section 1060, for the alleged violations of sections 16600 and 17200, were and are entirely moot. Of course, there is little to be gained by vacating those portions of Judge Cahill's order relating to Pike's noncompetition agreement. As we discuss in part II.B, post, the declaratory judgment in favor of AGI with respect to nonresident employees necessarily implies Hunter's noncompetition clause would not be enforceable to prevent the recruitment and hiring of any employee situated precisely as was Pike. Nevertheless, this court is not in the business of deciding issues that have lost their vitality as matters in "actual controversy." Accordingly, we will vacate those portions of the judgment relating to Pike's individual claims for declaratory relief.50
(3a) Hunter's principal contention on appeal is that the trial court erred in its application of conflict of laws principles to this case. AGI counters  that there is no true conflict of laws issue because all of the rulings by the trial court govern conduct and activities that occur exclusively in California. We reject both of these arguments but nevertheless conclude that the trial court did not err in applying California law to the issues raised by the complaint.52
It is important at the outset to clear away issues we need not decide to resolve the conflict of laws issue presented. As we have noted, there is no real dispute about the enforceability of a covenant not to compete in the employment agreement of Hunter employees who are residents of California. To the extent AGI and Pike alleged that Hunter requires a covenant not to compete from its employees who are California residents, Hunter has conceded that California law invalidates such provisions. It is quite clear that a covenant prohibiting a California employee from working for a competitor after termination of his or her employment violates section 16600, except in two circumstances not present here. (Muggill v. Reuben H. Donnelley Corp. (1965) 62 Cal.2d 239, 242 [42 Cal. Rptr. 107, 398 P.2d 147, 18 A.L.R.3d 1241]; Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal. App.4th 853, 860 [27 Cal. Rptr.2d 573].) Nor is there any genuine dispute about AGI's recruitment of Hunter consultants exclusively "for employment beyond the borders of California." Judge Norman clearly ruled that California law does not apply to or regulate such recruitment or employment, and AGI does not object to that aspect of the trial court's judgment.53
What is at issue is the trial court's ruling that Hunter's noncompetition clause is rendered unenforceable by sections 16600 and 17200 as against its nonresident consultants (such as Pike) when a California employer (such as AGI) seeks to hire them for employment in California. Hunter does not suggest any theory under which this use of its covenant not to compete would survive challenge if California law applies. Hunter simply contends the trial court should have decided this issue under Maryland law — in accordance with the contractual choice-of law-provision in the employment agreements of Hunter's nonresident employees — and, thus, found its noncompetition covenant to be enforceable in the present context. (See Holloway v. Faw, Casson & Co. (1990) 319 Md. 324 [572 A.2d 510, 515] [noncompetition agreements are enforceable so long as they are reasonable in scope and duration]; Ruhl v. F.A. Bartlett Tree Expert Co. (1967) 245 Md. 118 [225 A.2d 288, 291] [same].) AGI, for its part, does not dispute that  Hunter's covenant not to compete would be enforceable in these circumstances if Maryland law applies, but contends that application of Maryland law to the parties' dispute would be contrary to fundamental public policy of California. Thus, we must decide whether California or Maryland law applies to a dispute over the enforceability of Hunter's noncompetition clause when a California employer (such as AGI) seeks to hire one of Hunter's nonresident consultants (such as Pike) for employment in California.54
(4) Perhaps the most comprehensive statement of the California choice of laws principles applicable to this case can be found in a federal court opinion upon which Hunter places heavy reliance. In S.A. Empresa, etc. v. Boeing Co. (9th Cir.1981) 641 F.2d 746 (S.A. Empresa), the court observed: "California does not apply a mechanical test to choice-of-law questions. Rather, it employs the `governmental interest analysis.' Under this approach, California law will be applied unless the foreign law conflicts with California law and California and the foreign jurisdiction have significant interests in having their law applied. [Citations.] Where significant interests conflict, the court must assess the `comparative impairment' of each state's policies. [Citations.] The law applied will be that of the state whose policies would suffer the most were a different state's law applied. [Citations.] A separate choice-of-law inquiry must be made with respect to each issue in a case. [Citation.] [¶] The preceding rules apply regardless of whether the dispute arises out of contract or tort. [Citation.] An exception applies, however, in the case of contracts with choice-of-law provisions. California will apply the substantive law designated by the contract unless the transaction falls into either of two exceptions: [¶] 1) the chosen state has no substantial relationship to the parties or the transaction, or [¶] (2) application of the law of the chosen state would be contrary to a fundamental policy of the state. [Citations.] Under the second exception, where application of a choice-of-law provision would result in the contravention of California's public policy, the provision will be ignored to the extent necessary to preserve public policy. [Citations.]" (Id. at pp. 749-750; see also Bernhard v. Harrah's Club (1976) 16 Cal.3d 313, 319-321 [128 Cal. Rptr. 215, 546 P.2d 719] ["governmental interest" and "comparative impairment" approaches to choice of law problems]; Sommer v. Gabor (1995) 40 Cal. App.4th 1455, 1468 [48 Cal. Rptr.2d 235] [summarizing "comparative impairment" test]; North American Asbestos Corp. v. Superior Court (1986) 180 Cal. App.3d 902, 905 [225 Cal. Rptr. 877] [application of comparative impairment test in "`true'" conflict situation]; Dixon Mobile Homes, Inc. v. Walters (1975) 48 Cal. App.3d 964, 972  [122 Cal. Rptr. 202] ["comparative impairment" approach applies to both tort and contract cases].)56
Recently, the S.A. Empresa court's exposition and application of California choice of laws rules met with the approval of our Supreme Court. (Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, 464-466 & fn. 1 [11 Cal. Rptr.2d 330, 834 P.2d 1148] (Nedlloyd).) The Nedlloyd court recognized that, although the Ninth Circuit did not expressly say so, it was applying the "modern, mainstream" approach of section 187 of the Restatement Second of Conflicts of Laws (hereinafter Restatement), and, more particularly, subdivision (2) of that section. (Nedlloyd, supra, 3 Cal.4th at pp. 464-466, fns. 1 & 6; see also S.A. Empresa, supra, 641 F.2d at p. 749, citing Gamer v. duPont Glore Forgan, Inc. (1976) 65 Cal. App.3d 280, 287-288 [135 Cal. Rptr. 230] [explicit reference to Rest. § 187].)57
The Nedlloyd court elaborated: "[T]he proper approach under Restatement section 187, subdivision (2) is for the court first to determine either: (1) whether the chosen state has a substantial relationship to the parties or their transaction, or (2) whether there is any other reasonable basis for the parties' choice of law. If neither of these tests is met, that is the end of the inquiry, and the court need not enforce the parties' choice of law.... If, however, either test is met, the court must next determine whether the chosen state's law is contrary to a fundamental policy of California.... If there is no such conflict, the court shall enforce the parties' choice of law. If, however, there is a fundamental conflict with California law, the court must then determine whether California has a `materially greater interest than the chosen state in the determination of the particular issue....' (Rest., § 187, subd. (2).) If California has a materially greater interest than the chosen state, the choice of law shall not be enforced, for the obvious reason that in such circumstances we will decline to enforce a law contrary to this state's fundamental policy." (Nedlloyd, supra, 3 Cal.4th at p. 466, italics in original, fns. omitted.)58
Although the Nedlloyd court thus outlined the analytical approach to cases involving contractual choice-of-law provisions, it expressly declined to  decide how the principles of subdivision (2)(b) of section 187 of the Restatement would apply to cases in which the interests of the chosen state clash with a "fundamental policy" of California, because the court found that no "fundamental policy" of California was implicated in the case before it. (Nedlloyd, supra, 3 Cal.4th at pp. 466, fn. 6, 468.) However, in dicta, the Nedlloyd court cited S.A. Empresa, supra, 641 F.2d 746, as an example of a case involving such a conflict and, indeed, suggested that the Ninth Circuit had properly enforced the parties' contractual choice-of-law provision after finding that the interests of the chosen state (Washington) were materially greater than those of the forum state (California) even though "fundamental policy" of California may have been implicated in the parties' dispute. (Nedlloyd, supra, at p. 466, fn. 6; S.A. Empresa, supra, at pp. 750-753.)59
One of the difficulties in these cases is that the "materially greater interest" test of subdivision (2)(b) of section 187 of the Restatement overlaps with the "governmental interest" and "comparative impairment" analyses that must be conducted in California to determine which state "would be the state of the applicable law in the absence of an effective choice of law by the parties" (see Dixon Mobile Homes, Inc. v. Walters, supra, 48 Cal. App.3d at p. 972). Neither Nedlloyd nor S.A. Empresa, nor any other case disclosed by our research, discusses the relationship between and among these tests. The approach utilized by the Ninth Circuit for dealing with that problem in the S.A. Empresa case appears to have been to first examine the respective "governmental interests" of the chosen and forum states and then determine the extent to which those interests would be impaired by application of the other state's laws. (See S.A. Empresa, supra, 641 F.2d at pp. 752-753.) Under this approach, a court can decline to enforce the parties' contractual choice-of-law provision only if the interests of the forum state are "materially greater" than those of the chosen state, and the forum state's interests would be more seriously impaired by enforcement of the parties' contractual  choice-of-law provision than would the interests of the chosen state by application of the law of the forum state.60
(3b) Hunter is correct that the trial court did not explicitly undertake any formal choice-of-law analysis, as prescribed by the foregoing case law, but that does not mean the trial court came to the wrong conclusion. There is no dispute that the chosen state — Maryland — has a "substantial relationship" to the parties and their transaction. There is also no dispute that there is a "reasonable basis" for the parties' contractual choice-of-law provision. Indeed, the mere fact that one of the parties to the contract is incorporated in the chosen state is sufficient to support a finding of "substantial relationship," and the mere fact that one of the parties resides in the chosen state provides a "reasonable basis" for the parties' choice of law. (Nedlloyd, supra, 3 Cal.4th at pp. 467-468.)62
The parties also agree that California and Maryland are "potentially concerned" states with diametrically opposed laws regarding the enforceability of Hunter's noncompetition clause. (See Sommer v. Gabor, supra, 40 Cal. App.4th at p. 1467; North American Asbestos Corp. v. Superior Court, supra, 180 Cal. App.3d at p. 905.) As we have noted, with certain limited exceptions, California law renders void such provisions (§ 16600), while  Maryland law permits them so long as they are reasonable in scope and duration (Holloway v. Faw, Casson & Co., supra, 572 A.2d 4th at p. 515; Ruhl v. F.A. Bartlett Tree Expert Co., supra, 225 A.2d at p. 291). Furthermore, as we will discuss, each state purports to have significant interests in having its law applied. Thus, the real issues for decision are whether Maryland's law is contrary to a fundamental policy of California and, if so, which state has a "materially greater interest" in the determination of the issue and which state's interests would be more seriously impaired if its policy were subordinated to the policy of the other state. (Bernhard v. Harrah's Club, supra, 16 Cal.3d at p. 320; Sommer v. Gabor, supra, 40 Cal. App.4th at p. 1468.) As our Supreme Court has instructed, "careful consideration" of California policy and Maryland's interests is required in order to resolve these issues. (Nedlloyd, supra, 3 Cal.4th at p. 466, fn. 6.)63
AGI is correct when it argues that section 16600 reflects a "strong public policy" of the State of California. (KGB, Inc. v. Giannoulas (1980) 104 Cal. App.3d 844, 848 [164 Cal. Rptr. 571]; Frame v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1971) 20 Cal. App.3d 668, 673 [97 Cal. Rptr. 811] (Frame); Scott v. Snelling and Snelling, Inc. (N.D.Cal. 1990) 732 F. Supp. 1034, 1042.) Indeed, the strength of California's policy interest was the explicit basis for Judge Norman's rulings on the applicability of California law to Hunter's noncompetition covenants insofar as it affects employment in California. As the Second Appellate District recently observed: "California courts have consistently declared this provision an expression of public policy to ensure that every citizen shall retain the right to pursue any lawful employment and enterprise of their choice. Section 16600 has specifically been held to invalidate employment contracts which prohibit an employee from working for a competitor when the employment has terminated, unless necessary to protect the employer's trade secrets. [Citation.] The corollary to this proposition is that [a competitor] may solicit another's employees if they do not use unlawful means or engage in acts of unfair competition." (Metro Traffic Control, Inc. v. Shadow Traffic Network, supra, 22 Cal. App.4th at p. 859.) In Diodes, Inc. v. Franzen (1968) 260 Cal. App.2d 244 [67 Cal. Rptr. 19], the court further explained the policy underpinnings of section 16600, as follows: "The interests of the employee in his own mobility and betterment are deemed paramount to the competitive business interests of the employers, where neither the employee nor his new employer has committed any illegal act accompanying the employment change." (Diodes, Inc. v. Franzen, supra, at p. 255.) It follows that California has a strong interest in  protecting the freedom of movement of persons whom California-based employers (such as AGI) wish to employ to provide services in California, regardless of the person's state of residence or precise degree of involvement in California projects, and we see no reason why these employees' interests should not be "deemed paramount to the competitive business interests" of out-of-state as well as in-state employers. (Ibid.)64
To the extent it is invoked by a California employer to protect itself from "unfair competition," moreover, section 16600 (as implemented through sections 17200 and 17204) is all the more important as a statement of California public policy which ensures that California employers will be able to compete effectively for the most talented, skilled employees in their industries, wherever they may reside. In this day and age — with the advent of computer technology and the concomitant ability of many types of employees in many industries to work from their homes, or to "telecommute" to work from anywhere a telephone link reaches — an employee need not reside in the same city, county, or state in which the employer can be said to physically reside. California employers in such sectors of the economy have a strong and legitimate interest in having broad freedom to choose from a much larger, indeed a "national," applicant pool in order to maximize the quality of the product or services they provide, as well as the reach of their "market." California has a correlative interest in protecting its employers and their employees from anticompetitive conduct by out-of-state employers such as Hunter — including litigation based on a covenant not to compete to which the California employer is not a party — who would interfere with or restrict these freedoms.65
Hunter suggests, however, that Maryland has an equally strong public policy favoring the use and enforcement of its noncompetition covenants, insofar as they serve the interests of Maryland employers in preventing recruitment of employees who provide "unique services," and the misuse of trade secrets, routes, or lists of clients, or solicitation of customers. (Fowler v. Printers II (1991) 89 Md. App. 448 [598 A.2d 794, 799]; Becker v. Bailey (1973) 268 Md. 93 [299 A.2d 835]; Holloway v. Faw, Casson & Co., supra, 572 A.2d at p. 515.) However, there is nothing in the record of this case to support a finding that failure to enforce Hunter's noncompetition covenant would significantly impair either of the asserted interests. We have no reason to doubt the parties' showing that highly skilled consultants such as Pike are a scarce resource. But, with all due respect to Ms. Pike, there is no showing  that she performed "unique services" for Hunter. There is also no showing that Pike was attempting to exploit Hunter's trade secrets or other protected information about its customers. In any event, should such concerns arise with respect to the recruitment of other Hunter consultants for employment in California, Hunter has recourse under both Maryland and California law. (See, e.g., Morlife, Inc. v. Perry (1997) 56 Cal. App.4th 1514 [66 Cal. Rptr.2d 731].)66
We are, therefore, convinced that California has a materially greater interest than does Maryland in the application of its law to the parties' dispute, and that California's interests would be more seriously impaired if its policy were subordinated to the policy of Maryland. Accordingly, the trial court did not err when it declined to enforce the contractual conflict of law provision in Hunter's employment agreements. To have done so would have been to allow an out-of-state employer/competitor to limit employment and business opportunities in California. As the Nedlloyd court held, California courts are not bound to enforce a contractual conflict of law provision which would thus be "contrary to this state's fundamental policy." (Nedlloyd, supra, 3 Cal.4th at p. 466, fn. omitted; see also Frame, supra, 20 Cal. App.3d at p. 673; Hollingsworth Solderless Terminal Co. v. Turley (9th Cir.1980) 622 F.2d 1324, 1338; Davis v. Jointless Fire Brick Co. (9th Cir.1924) 300 F. 1, 2-3; Scott v. Snelling and Snelling, Inc., supra, 732 F. Supp. at pp. 1039-1040, 1041.)67
Frame, supra, 20 Cal. App.3d 668, is closely on point. In that case, the plaintiff brought an action seeking a determination that a portion of an agreement between the plaintiff and his former employer, a stock brokerage, was void under section 16600 to the extent it provided for forfeiture of profit-sharing rights by any employee who voluntarily terminated his employment and went to work for a competitor. (20 Cal. App.3d at p. 670.) The trial court and the court of appeal agreed with the plaintiff, and rejected the employer's argument that the forfeiture clause was valid under New York law and, thus, enforceable under a clause in the profit-sharing plan designating New York law as governing their rights under the contract. (Id. at p. 673.) The Frame court held that it could not allow New York law to defeat the "strong public policy" embodied in section 16600 and, thus, declined to give effect to the parties' contractual choice-of-law provision. (20 Cal. App.3d at p. 673; see also Davis v. Jointless Fire Brick Co., supra, 300 F. at pp. 2-3.) It is noteworthy that the court in S.A. Empresa, supra, 641 F.2d  746, cited Frame for the proposition that "... where application of a choice-of-law provision would result in the contravention of California's public policy, the provision will be ignored to the extent necessary to preserve public policy." (Id. at p. 749, cited with approval in Nedlloyd, supra, 3 Cal.4th at pp. 464-466, fns. 1 & 6.)68
In defense of its noncompetition clause, Hunter does not rely heavily upon a claim that the State of Maryland has legitimate and compelling interests in the enforcement of the covenant, beyond a general interest in the enforceability of a contract valid where made. Hunter simply suggests that we should focus our attention on the "relevant contacts" of the parties with California and Maryland (see Robert McMullan & Son, Inc. v. United States Fid. & Guar. Co. (1980) 103 Cal. App.3d 198, 205 [162 Cal. Rptr. 720], citing Dixon Mobile Homes, Inc. v. Walters, supra, 48 Cal. App.3d at p. 972, fn. 4), and, on that basis, conclude the trial court erred by reading section 16600 as a "super-statute" applicable to out-of-state contracts as to which California has no interest. In a related argument, Hunter suggests that Maryland law was the "only law apparently applicable" at the time of contracting and that we must honor the expectations of the parties in that regard. (See Bernkrant v. Fowler (1961) 55 Cal.2d 588, 594-595 [12 Cal. Rptr. 266, 360 P.2d 906].) It is only by exaggerating and distorting the reach of the trial court judgment, and by ignoring important features of "relevant contacts" analysis, that Hunter can take this position.69
(5) "With the governmental interest approach, `relevant contacts' stressed by the Restatement Second of Conflict of Laws are not disregarded, but are examined in connection with the analysis of the interest of the involved state in the issues, the character of the contract and the relevant purposes of the contract law under consideration." (Dixon Mobile Homes, Inc. v. Walters, supra, 48 Cal. App.3d at p. 972, fn. omitted.) In contract cases, these "relevant contacts" include: "`(a) the place of contracting, [¶] (b) the place of negotiation of the contract, [¶] (c) the place of performance, [¶] (d) the location of the subject matter of the contract, and [¶] (e) the domicil, residence, nationality, place of incorporation and place of business of the parties.'" (Id., at p. 972, fn. 4, quoting Rest. § 188, subd. (2).)70
 (3c) In essence, Hunter suggests this court should mechanically apply an outdated — or at least incomplete — "choice-of-laws" test which, it contends, would result in a choice of Maryland law because that was the place where the contract was negotiated, entered into and performed, as well as "the domicil, residence, nationality, place of incorporation and place of business" of the parties to the contract, i.e., Hunter and Pike. While partially correct, this argument indicates that Hunter's focus is on the wrong "contract." There is no issue in this case about the enforceability of Pike's employment agreement, only of the covenant not to compete. That covenant was negotiated and signed in Maryland, which is both Pike's and Hunter's state of residence, but Maryland was not the exclusive place of business of either Hunter or Pike and was not necessarily the place where the covenant was to be "performed." In this case, moreover, the contracting parties were undoubtedly well aware that the purpose of the noncompetition clause was to prevent Hunter's competitors, especially those in California, from recruiting and hiring Hunter's consultants. Thus, the parties were or should have been alerted to the possibility that California law could come into play in the course of their relationship. In fact, the issue of "performance" arose — at least in part — in California when Pike was recruited by and accepted employment with a California employer to perform services in California. Similarly, although Hunter overlooks this aspect of the Restatement test, "the subject matter of the contract" is arguably subsequent employment which was, in this case, employment by a competitor who is "located" in California.71
Even more fundamentally, however, Hunter overlooks the facts that AGI is a key player in this drama. AGI is a California employer against whom Hunter has repeatedly threatened and attempted to "enforce" the relevant "contract" — a contract, as we have noted, to which AGI is not even a party. We simply cannot ignore AGI's interests, and those of the state of California, with respect to enforceability of Hunter's noncompetition covenants as it affects employment and business opportunities in California.72
Nor can we overlook the fact that Hunter itself has significant "contacts" with California. Hunter maintains an office in California, conducts business in California, competes head-to-head with AGI for California customers, and  maintains close relationships with California software companies whose products it supports. Hunter also freely admits it has actively sought to recruit AGI employees who, under California law and AGI policy, cannot be saddled with a covenant not to compete. Indeed, Hunter even pays its current employees a reward for referring any AGI consultant who is successfully recruited for employment by Hunter. Thus, if we were to engage only in the "relevant contacts" analysis Hunter urges, we would not find error in the trial court's decision to apply California law.73
Finally, Hunter contends that the trial court's declaratory judgment was "woefully vague and ambiguous" and, for that reason, unenforceable. We disagree. It is true that, to fall within the scope of the trial court's declaratory judgment, a recruited employee need not have had any prior contact with California, so long as the goal of the solicitation is "employment in California," or employment in "business to be performed in California." As to any such employee, the trial court declared that Hunter's covenant not to compete is invalidated by section 16600. In essence, the trial court acted to protect AGI's freedom to solicit or recruit out-of-state consultants for employment in California, as well as the rights of non-California residents, who are prospective employees of a California company, to engage in a business or profession in California if they so choose. (§ 16600.) Under Judge Norman's ruling, however, it is plainly not sufficient simply to be employed by a California-based employer such as AGI, or to be treated as a California employee for tax and other legal purposes, if the employee is to perform services exclusively "beyond the borders of California."74
Under Hunter's own reasoning, it could not enforce its noncompetition covenant against a former consultant who accepts a position with AGI after moving to California and becoming a "citizen" of this state — even if the consultant does 100 percent of his or her work outside the State of California. But we agree with the trial court that the enforceability of Hunter's noncompetition covenant does not turn on whether the recruited employee physically resides in California. The concept of "employment in California" is broader than that, at least in the expansive and dispersed industry with which we deal in this case. It must also take into account the location of the employer, and the location of the employer's vendors and customers. Viewing the larger picture, the trial court did not err in concluding that an employee of a California-based employer, who performs services for California-based customers, is "employed in California" and, thus, "engage[d] in a business or profession" in California, so as to enjoy the protection of section 16600.75
(6a) Hunter also contends the trial court erred when it concluded that, in addition to violating section 16600, Hunter's use of its noncompetition covenant to prevent its former consultants from obtaining employment by AGI in California violates the Unfair Practices Act (UPA) (§ 17200 et seq.). Section 17200 expresses California public policy against unfair  competition, and prohibits "wrongful business conduct in whatever context such activity might occur." (Stoiber v. Honeychuck (1980) 101 Cal. App.3d 903, 927 [162 Cal. Rptr. 194].) Section 17200 defines unfair competition as, inter alia, any "unlawful, unfair or fraudulent business practice." (7a) "The `unlawful' practices prohibited by section 17200 are any practices forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made. [Citation.] It is not necessary that the predicate law provide for private civil enforcement. [Citation.] As our Supreme Court put it, section 17200 `borrows' violations of other laws and treats them as unlawful practices independently actionable under section 17200 et seq. [Citation.]" (Saunders v. Superior Court (1994) 27 Cal. App.4th 832, 838-839 [33 Cal. Rptr.2d 438].)77
(6b) In this case, Judge Norman expressly found that, to the extent Hunter requires a covenant not to compete in the employment agreements of employees who are not California residents, but who seek employment in California with a California-based employer, the noncompetition agreement is an "unenforceable contract to restrain trade," use of which constitutes "unfair competition" in violation of section 17200. AGI contends, more broadly, that use of a covenant not to compete in this context is both "unlawful" and "unfair" within the meaning of section 17200.78
(7b) California courts have recognized that an employer's business practices concerning its employees are within the scope of section 17200. (Hudgins v. Neiman Marcus Group, Inc. (1995) 34 Cal. App.4th 1109, 1126 [41 Cal. Rptr.2d 46]; Wilkinson v. Times Mirror Corp. (1989) 215 Cal. App.3d 1034, 1052 [264 Cal. Rptr. 194]; People v. Los Angeles Palm, Inc. (1981) 121 Cal. App.3d 25, 32-33 [175 Cal. Rptr. 257].) For example, where the employer's policy or practice is forbidden by or found to violate the Labor Code, it may also be held to constitute an "unlawful business practice" subject to redress under the UPA. (See Hudgins v. Neiman Marcus Group, Inc., supra, 34 Cal. App.4th at p. 1126 [employer policy of deducting losses for unidentified returns when calculating employees' wages violates both Labor Code section 221 and Business and Professions Code section 17200]; People v. Los Angeles Palm, Inc., supra, 121 Cal. App.3d at pp. 32-35 [employer practice of crediting tips of restaurant employees against their minimum wage violates both Labor Code section 351 and Business and Professions Code section 17200].) The reasoning of these cases applies as well to contractual provisions that are found to violate the Business and Professions  Code. (See Saunders v. Superior Court, supra, 27 Cal. App.4th at pp. 838-839; but cf. Californians for Population Stabilization v. Hewlett-Packard Co., supra, 58 Cal. App.4th at pp. 287-292.)79
(6c) Of course, the twist in this case is that the employer whose practice is being challenged as "unfair competition" is not a California-based employer. But Hunter presents no authority that holds or suggests that nonresident businesses cannot be held to account for "wrongful business conduct" affecting California employers and employees (Stoiber v. Honeychuck, supra, 101 Cal. App.3d at p. 927), and none is disclosed by our research. Indeed, one California court has held that the law of the state in which a "restraint of trade" will occur overrides that of other states with more limited contacts with the transaction at issue. (Bushkuhl v. Family Life Ins. Co. (1969) 271 Cal. App.2d 514, 521 [76 Cal. Rptr. 602]; cf. Birbrower, supra, 17 Cal.4th at pp. 128-129 [section 6125 regulates out-of-state attorneys, and invalidates fee agreement made with out-of-state law firm to the extent contract is for legal representation "in California"].) We have already discussed at length the interests of California and Maryland in the enforceability of Hunter's noncompetition covenant in the circumstances of this case and have concluded that California's interests should prevail. For similar reasons, we conclude California law may be applied to AGI's claim of unfair competition and that, thus, the trial court did not err in finding Hunter's use of a covenant not to compete in violation of section 16600 to be a violation of section 17200 as well.80
The judgment shall be modified to delete those portions relating to Pike's individual claims for relief. As thus modified, the judgment will be affirmed. The parties shall bear their own costs.82
Parrilli, J., and Walker, J., concurred.83
Appellant's petition for review by the Supreme Court was denied May 13, 1998.84
All statutory references are to the Business and Professions Code unless otherwise indicated.85
In relevant part, section 16600 provides: "[E]very contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Section 17200 defines "unfair competition." It "... include[s] any unlawful, unfair or fraudulent business act or practice...." (Ibid.)86
 Between July 1991 and the end of 1993, 14 Hunter employees performed 12,250 hours of billable service for its California-based customers. Two of these employees, who were responsible for 3 percent of Hunter's billings in California during the same period, worked under covenants not to compete.87
 In the course of argument on the motion for judgment, the Maryland court found that the covenant not to compete in Pike's employment agreement was valid on its face and enforceable, at least under Maryland law. However, as far as this record discloses, the parties did not actively litigate, and the Maryland court did not actually decide, the choice-of-laws issue presented in the instant action. Even if it did decide that Maryland law determines the enforceability of Hunter's covenant not to compete in all circumstances, the court's ruling on the choice-of-laws issue was not essential to the judgment in favor of Pike and AGI and, thus, need not be given issue preclusive (collateral estoppel) effect. (See Lumpkin v. Jordan (1996) 49 Cal. App.4th 1223, 1230 [57 Cal. Rptr.2d 303]; Rest.2d Judgments, § 27.)88
 A final order on the parties' cross-motions for summary judgment and summary adjudication of issues was not filed until February 22, 1995, after the trial of this action was completed.89
 These paragraphs were part of the prayer for relief, as follows: "50. For a declaration that Business and Professions Code sections 16600 and 17200 give AGI a privilege, with respect to any of [Hunter's] computer consultants and former consultants, to call and recruit such consultants from California; [¶] 51. For a declaration that Business and Professions Code sections 16600 and 17200 permit AGI to recruit and hire, from California, any [Hunter] computer consultants and former consultants who are residents of California, who work or have worked in California, or who report to or are managed from, or have reported to or have been managed from, any California office, whether or not such employees have a Covenant Not To Compete with [Hunter]; [¶] 52. For a declaration that, under California law, [Hunter] may not attempt to enforce in California any out-of-state judgment or injunction which [Hunter] might obtain against AGI for AGI's recruitment or hiring of any [Hunter] computer consultant who has a Covenant Not To Compete with [Hunter]; [¶] ... [¶] 55. For a declaration that [Hunter] is bound by the law of the State of California, specifically Business and Professions Code sections 16600 and 17200, with respect to its computer consultants who are residents of California, or who work or have worked in California, or who report to or are managed from, or have reported to or have been managed [from a Hunter] office in California. [¶] 56. For a declaration that with respect to [Hunter's] computer consultants who are residents of California, or who work or have worked in California, or who report to or are managed, or have reported to or been managed from, [a Hunter] office in California, [Hunter's] use of Covenants Not To Compete with such consultants is illegal, invalid and unenforceable under Business and Professions Code sections 16600 and 17200. [¶] 57. For a declaration that, under California law, [Hunter] may not attempt to enforce in California any out-of-state judgment or injunction which [Hunter] might obtain against AGI for interference in [Hunter's] Covenant Not To Compete."90
 Nor could it. AGI seeks declaratory relief regarding the enforceability of a specific contract, under which Hunter has made multiple threats of litigation and has on at least one occasion brought suit against AGI, and as to which AGI and Hunter will continue to have run-ins as they compete for employees to work on projects for their customers, and otherwise conduct their business in California. In these respects, we cannot fairly conclude that the trial court abused its discretion to grant declaratory relief. This is not a case in which the court is being called upon to "imagine a myriad of hypotheticals," or to speculate on the application of law to such hypotheticals. (Cf. BKHN, Inc. v. Department of Health Services (1992) 3 Cal. App.4th 301, 309-310 [4 Cal. Rptr.2d 188]; see also Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal. App.3d 405, 410-411 [256 Cal. Rptr. 240].) The trial court had before it evidence of the very real and concrete controversy over Pike's recruitment by AGI. The court reasonably could find that the dispute over Pike's employment is typical of controversies that will almost certainly continue to arise between AGI and Hunter over nonresident employees. Furthermore, it is essentially a pure question of law whether Hunter's covenant not to compete is enforceable when invoked to prevent a California-based competitor from soliciting or recruiting a current or former Hunter consultant for employment in California. Plainly, AGI is such a competitor and it has been and will continue to be subject to litigation in this precise factual context.91
 In addition, there is the issue of enforceability of Hunter's covenants not to compete as to former consultants who may relocate to become residents of California during the period of noncompetition stated in their employment agreements, insofar as such nonresident employees may wish to become employed in California.92
 There is no argument that Pike's claim is "capable of repetition, yet evading review" (Gannett Co. v. DePasquale (1979) 443 U.S. 368, 377 [99 S.Ct. 2898, 2904, 61 L.Ed.2d 608]), or that the controversy was of such short duration so as to preclude normal appellate review (In re Willon (1996) 47 Cal. App.4th 1080, 1089 [55 Cal. Rptr.2d 245]; cf. Press-Enterprise Co. v. Superior Court (1986) 478 U.S. 1, 6 [106 S.Ct. 2735, 2739, 92 L.Ed.2d 1]; San Jose Mercury-News v. Municipal Court (1982) 30 Cal.3d 498, 501, fn. 2 [179 Cal. Rptr. 772, 638 P.2d 655]).93
 Again, this statement of the issue encompasses former Hunter employees who may relocate from out of state to become California residents during the period of noncompetition stated in their employment agreements.94
 In relevant part, Restatement section 187, subdivision (2), provides that the law of the chosen state will be applied unless: "(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or [¶] (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which ... would be the state of applicable law in the absence of an effective choice of law by the parties." (Italics added.)95
 In that regard, the S.A. Empresa court apparently found that Washington had a materially greater interest in having its law determine the validity of an exculpatory clause in a contract for sale of a plane that later crashed, i.e., a clause which effectively immunized the Washington-based airplane manufacturer against a breach of warranty suit filed by a foreign purchaser (a Brazilian corporation) and, thus, required the purchaser to bear the entire loss even if misconduct by the manufacturer caused the crash. (641 F.2d at p. 753.) Indeed, the S.A. Empresa court did not consider California as having any significant interest in the dispute because its public policy was designed to protect its citizens and the plaintiff purchaser was not even a California corporation. Accordingly, even though California public policy may have prohibited enforcement of the exculpatory clause (see Civ. Code, § 1668), and despite the probability that application of the chosen state's laws would produce a result in conflict with a "fundamental policy" of California, the S.A. Empresa court held that it was proper to apply the law of the chosen state, Washington. (S.A. Empresa, supra, 641 F.2d at p. 753.)96
 It is efficient to begin the analysis under Restatement section 187, subdivision (2)(b), with the standard "governmental interest" and "comparative impairment" tests because an early determination that the chosen state and the state that would provide "the applicable law in the absence of an effective choice of law by the parties" are one and the same, or a finding that the chosen state is the only state with a significant interest in having its law applied, obviates any need to weigh the forum's public policy interests against the chosen state's interests or to determine which state has the "materially greater interest" in having its law applied.97
 Furthermore, it is clear Judge Norman did consider both the interests of the concerned states, and the parties' "contacts" and "connections" with those states. That he did not analyze the issues precisely as Hunter would have liked did not render his statement of decision, or the judgment, deficient in any way.98
 Thus, this is a "`true' conflict" case. (See Sommer v. Gabor, supra, 40 Cal. App.4th at p. 1467; North American Asbestos Corp. v. Superior Court, supra, 180 Cal. App.3d at p. 905.) There are other "potentially concerned" states including, for example, the ones in which other nonresident Hunter employees may reside, which may have interests, like Maryland's, in the enforceability of covenants not to compete, valid where made, and the competitive advantages of such provisions. On the other hand, other "potentially concerned" states may broadly prohibit covenants not to compete, as does California, with the result being no real "choice-of-law" issue. Or the "other" states might allow "reasonable" restrictions on the Hunter employee's freedom to compete after termination, but may find one year too long a period or the geographical reach of the covenant too broad. However, the parties focus their choice of laws arguments on California and Maryland as the two "potentially concerned states" with respect to the enforceability of Pike's covenant not to compete, and agree that these laws call for diametrically opposite results on that issue. For that reason, our discussion will maintain the same focus.99
 It appears that Hunter's real concern about Pike's recruitment was that it would have to pay more for a replacement than it was paying her. But, in light of the "no damages" judgment in the Maryland court, even that concern did not materialize.100
 Hunter also relies on Roesgen v. American Home Products Corp. (9th Cir.1983) 719 F.2d 319, a case in which the Ninth Circuit affirmed a trial court's ruling that New York law applied to a forfeiture provision in an employment agreement, which was triggered by the employee's subsequent employment by a California-based competitor of the first employer. That reliance is misplaced. The federal appellate court applied the highly deferential "clear error" standard of review to the trial court's ruling, one which Hunter insists is inappropriate in the conflict of laws context. Indeed, application of such a lenient standard of review may well have resulted in an erroneous decision under California law by a federal court, which we need not follow. (Cf. Muggill v. Reuben H. Donnelley Corp., supra, 62 Cal.2d at p. 242; Frame, supra, 20 Cal. App.3d at pp. 672-673.)101
 Thus, we express no opinion about the enforceability of other provisions in the employment agreements of Hunter consultants who may perform services in California but whose contracts expressly state that they are to be "governed by and construed in accordance with the laws of the State of Maryland."102
 In these respects, Bernkrant v. Fowler, supra, 55 Cal.2d 588, is distinguishable because the contract in that case was a "purely local transaction" made and performed in Nevada, involving the refinancing of obligations arising from the sale of Nevada land and secured by interests therein. (Id. at pp. 594-595.)103
 We note that Judge Norman did not attempt to define what it means to be employed "in California." We express no opinion as to the precise contours of that concept, leaving it to the parties to raise the issue in the future if and when a dispute over that issue should arise in connection with the declaratory judgment in this case. We note, however, that our Supreme Court recently decided a case which may provide some guidance on the issue. In Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119 [70 Cal. Rptr.2d 304, 949 P.2d 1] (Birbrower), the court held that whether an attorney may be deemed to be practicing law "in California" for purposes of section 6125 (requiring State Bar membership) will be determined on a case-by-case basis using a "sufficient contacts" analysis, as follows: "In our view, the practice of law `in California' entails sufficient contact with the California client to render the nature of the legal service a clear legal representation. In addition to a quantitative analysis, we must consider the nature of the unlicensed lawyer's activities in the state. Mere fortuitous or attenuated contacts will not sustain a finding that the unlicensed lawyer practiced law `in California.' The primary inquiry is whether the unlicensed lawyer engaged in sufficient activities in the state, or created a continuing relationship with the California client that included legal duties and obligations. [¶] Our definition does not necessarily depend on or require the unlicensed lawyer's physical presence in the state. Physical presence here is one factor we may consider ..., but it is by no means exclusive. For example, one may practice law in [California] although not physically present here by advising a California client on California law in connection with a California legal dispute by telephone, fax, computer, or other modern technological means. Conversely, although we decline to provide a comprehensive list of what activities constitute sufficient contact with the state, we do reject the notion that a person automatically practices California law `in California' whenever that person practices law anywhere, or `virtually' enters the state by telephone, fax, e-mail, or satellite. [Citations.]" (17 Cal.4th at pp. 128-129, italics in original.)104
 Just prior to oral argument on November 25, 1997, AGI and Pike moved to dismiss this appeal on the grounds that Hunter failed to notify the Consumer Law Section of the Office of the Attorney General and the San Francisco District Attorney of the pendency of this "appellate proceeding," as required by section 17209 when the "application or construction" of the UPA is in issue. In Californians for Population Stabilization v. Hewlett-Packard Co. (1997) 58 Cal. App.4th 273 [67 Cal. Rptr.2d 621], the Sixth Appellate District held that a notice served pursuant to section 17209 will be deemed timely if it is served within three days of the filing of the appellant's opening brief on appeal, but that failure to give timely notice is not a jurisdictional defect. (58 Cal. App.4th at pp. 284-285.) Counsel for Hunter candidly admits he was unaware of the requirements of section 17209, and that the statutory notices were not served until November 18, 1997, long after the case had been fully briefed and calendared for oral argument. We are not convinced that Hunter has made an adequate showing of good cause for an extension of time to serve the required notices. Nevertheless, based on the proofs of service filed in this court, we are satisfied that the relevant public prosecutors have had ample time to seek permission to participate as amici curiae or otherwise influence the prosecution of this appeal. Accordingly, we will deny AGI's motion to dismiss and proceed to the merits of Hunter's claims of error under section 17200. Should the Attorney General or the San Francisco District Attorney wish to intervene prior to entry of final judgment in this case, we will entertain a timely petition seeking rehearing on that basis, as to those portions of the opinion dealing with the UPA.105
 Hunter quotes language from Californians for Population Stabilization v. Hewlett-Packard Co., supra, 58 Cal. App.4th 273, for the proposition that "The mere fact that certain provisions were unenforceable in California does not render the use of the documents an unfair business practice." (58 Cal. App.4th at p. 293.) This passage appears, at first blush, to support a conclusion that Hunter's use of covenants not to compete does not violate section 17200. Upon closer examination, however, the Sixth Appellate District's holding follows from the fact that the plaintiff failed to prove any of its claims that the contractual provisions at issue were "unlawful" under various California statutes, including section 16600, leaving it with only the "unfair" business practice prong of section 17200 as a basis for obtaining relief. (58 Cal. App.4th at pp. 287-293.) The instant challenge is different in that AGI is claiming, and proved to the satisfaction of the trial court, that Hunter's covenant not to compete (as it was used against Pike and AGI) is not simply "unfair" or "unenforceable" but, rather, violates a specific statute (§ 16600) and is, thus, to that extent "unlawful" under section 17200. Of course, the Californians for Population Stabilization court also stated, in dictum, that it is questionable whether violations of the statutes at issue there (§ 16600; Civ. Code, §§ 1670.5, 1671) can support a cause of action under 17200 for an "unlawful" business practice. (58 Cal. App.4th at p. 287.) As with most dicta, this statement is deserving of little or no weight in our analysis.106
 We need not decide, and express no opinion on, two additional issues raised by Hunter in its briefs. We do not construe the trial court's judgment as including declaratory relief with respect to either the "full faith and credit" owed to any judgment Hunter "might obtain" against AGI or Pike, or the existence of a "privilege" under California law to disregard Hunter's covenant not to compete. AGI and Pike have conceded as much.