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CHOICE OF LAW HYPOTHETICAL Phyllis resides in Silicone Valley California.

She is president of Chips Ahoy, a company that develops and produces high powered computer chips. Chips Ahoy is a Delaware corporation with its principle place of business in California. Dennis resides in Oregon. He is president of Computer Operation, Inc. Computer Operation, Inc. is a Delaware corporation with its principle place of business in Eugene, Oregon. Can have diversity jdxDennis contacts Phyllis by phone. He explains to Phyllis that he is interested in having Phyllis' company develop and manufacture a high powered computer chip specially designed to meet the demands of several of his sophisticated corporate customers. After their initial conversation, Dennis and Phyllis exchange many written specifications and plans. In these written communications and in subsequent phone calls Dennis makes it clear to Phyllis that he must have this chip in his hands by December 10th, 2010 or he will lose a substantial amount of business. During a trip to Eugene to visit her daughter, a college sophomore at the University of Oregon, Phyllis visits Dennis' business headquarters. She takes him to dinner in an attempt to persuade him that her company can develop what he needs. Dennis then visits California to tour the facilities of Phyllis' company and to meet her computer engineers. Impressed by what he sees, Dennis enters into a contract with Phyllis' company while he is in California. In the contract Phyllis agrees to develop a highly specialized computer chip suited to Dennis' customers' needs. She also agrees to manufacture 1000 of these chips. The requirement, however, that Dennis receive the chips no later than December 10th, 2010 does not become part of the written contract. The requirement was so much a part of their understanding that Dennis did not think to include it. Needless to say Phyllis does not meet the December 10th deadline. As a result Dennis loses $2,000,000 in customer orders. Dennis then sues Phyllis for breach of contract in the Oregon state court. He asks for $2,000,000 for loss of business, $500,000 for loss of business reputation, and for costs. Phyllis counters with a Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted. Phyllis argues that California law applies to this controversy. Three of Californias five Courts of Appeal employ a parole evidence rule that clearly states that the written terms of a contract control and courts cannot consider extrinsic evidence. The other two Courts of Appeal have not addressed the issue. Phyllis argues that no written contractual term exists that requires Phyllis to deliver Dennis' chip by December 10 th, 2010. As a consequence, pursuant to California law, Phyllis did not breach the contract by the failure to deliver the chips to Dennis by December 10, 2010. Therefore, Phyllis concludes, she has not breached the contract, and the court must dismiss the suit for Failure to State a Claim. The Oregon commercial code, however, contains a statutory provision that authorizes courts to examine evidence extrinsic to commercial contracts in order to determine the true intent of the parties. As the Oregon state court judge, how would you rule on Phyllis motion and WHY?

Phillis Delaware and California - She goes to visit daughter, and then visits his place of business in Oregon o Contact created o Contract entered into in CA when Dennis visits o that Dennis receive the chips no later than December 10th, 2010 does not become part of the written contract o She doesnt meet deadline - He files suit against her in Oregon - Phyllis counters with a Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted. Phyllis argues that California law applies to this controversy o Three of Californias five Courts of Appeal employ a parole evidence rule that clearly states that the written terms of a contract control and courts cannot consider extrinsic evidence. o that no written contractual term exists that requires Phyllis to deliver Dennis' chip by December 10th, 2010. o Oregon commercial code, however, contains a statutory provision that authorizes courts to examine evidence extrinsic to commercial contracts in order to determine the true intent of the parties. Dennis- Oregon - He reaches out to Phillis by phone- creates the contact in CA - They exchange written correspondence regarding his hiring her to make the chips for him o He specifies he needs it by December 10th - Dennis visits CA to tour the premises o Dennis enters into a contract with Phyllis' company while he is in California o that Dennis receive the chips no later than December 10th, 2010 does not become part of the written contract o Phillis doesnt meet deadline o Dennis loses 2 million in revenue due to the delay - Dennis then sues Phyllis for breach of contract in the Oregon state court. He asks for $2,000,000 for loss of business, $500,000 for loss of business reputation, and for costs. o that no written contractual term exists that requires Phyllis to deliver Dennis' chip by December 10th, 2010. o Oregon commercial code, however, contains a statutory provision that authorizes courts to examine evidence extrinsic to commercial contracts in order to determine the true intent of the parties. Can Oregon get Personal Jurisdiction over Phillis - Not general, contacts not big enough - Specific? ANALYTICAL STRUCTURE for dealing with Personal Jdx question - non resident defendant

Statutory authority1. neither state or fed ct sitting in diversity can exercise PJ over a non-resident defendant unless the factual circumstances fulfill the criteria articulated in Long arm statute AND Constitutional authority2. Due process requires that the def have such minimum contacts with the forum state such that exercise of Jdx over the def in that state does not offend traditional notions of fair play and substantial justice A. Minimum contact principles i. Stream of commerce PLUS purposeful availment 1. If you have Stream of commerce- go to stream of commerce PLUS analysis- lawsuit must arise from the conduct in the area Balanced against B. Factors relevant to whether JDX would offend our traditional notions of fair play and substantial justice i. Due process requirements: 1. Notice 2. Personal JDX/ Authority (over (non-resident) defendant) a. Test is minimum contacts and fair play and substantial justice i. Purpose of MC test is: 1. to guarantee from inconvenient litigation a. Inconvenience/burden to the defendant 2. Federalism 3. Forum states interest in hearing the dispute a. (hearing:)Taking physical possession of that suit and deciding it in their courts i. Why- to protect their own citizens 4. Plaintiffs interest in obtaining relief 5. Judicial efficiency 6. Important social policies

CHOICE OF LAW ANALYSIS 1. Other interested states 2. Is there a conflict a. Is there a good faith effort 3. Conflict of law provision forum

Hypo 7 discussion: Choice of Law Analysis 1. Is there a conflict? Contacts, state interest, due process rights/ expectations of the parties- YOU MUST BREAK THIS DOWN a. California has no statute b. Orgeon commercial code- has statutory provision authorizing courts to examine evidence extrinsic to commercial contracts in order to determine the true intent of the parties i. Must make good faith effort to determine whether there is a conflict between California and Oregon 1. Not a very high standard c. No conflict because California has no statute at all, Oregon does i. California has the three courts that employ a parole evidence rulecannot d. Choice of law provisions- go there to say I would examine choice of law provisions of both states to see if they provide any guidance but because I Was given none, I am assuming that there are none i. Court interpretation e. Where do we go to determine whether Oregon can use its own law i. Whether the state has sufficient contacts creating state interest such that use of states law does not seem arbitrary or unfair...ertc- LOOK THIS UP ii. ...transaction or occurrence 1. Principle place of business- Oregon Plaintiff- Oregon a. Oregon wants to protect its citizens and businesses (severely hurt here) iii. Breach and injury both in Oregon they both have been injured f. How do we know this is important to Oregon? i. ITS STATUTE- it went through trouble to articulate state interest in commercial transactions by statute! 1. Not just resident and corporation are there g. We are concerned with the expectations of both plaintiff and defendant i. Thats why we dont want to use some random unexpected law h. Plaintiff probably knows the Oregon Statute i. This may be why he didnt think it was critical to put into the original contract

i.

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Phyllis expectations- You initiated contact when you called someone in California, you went to Cali to view sight and actually entered into contract in CA, how could you expect Oregon law to apply? i. She would expect CA law to apply ii. She only went there for ONE evening to discuss the contract with him iii. She would never expect Oregon law to apply FLIP SIDE- Dennis: When you enter into business, maybe you should pay attention to the laws of that state; she went to Oregon, Perhaps he is relying on his own law- course of dealing and being well aware he had to have delivery by a specific date and the fact that it was not in K mnight have raised a flag.

Contacts of forum state, parties transaction or occurrence- SUFFICIENT contacts, or siufficient aggregation of contacts that create a state interst such that the use of that states law doesnt seem arbitrary or unfair 1. Contacts 2. State interest (full faith and credit) 3. Arbitrary and unfair (due process concern- dont violate normal expectations of the party)