Contractual Choice of Law and the Prudential Foundations of Appellate Review

Within the past decade, professional organizations interested in making the law better suited to commercial transactions have begun to advocate the proposition that contracting parties should have almost unlimited power to choose the law to govern their relationship. The new choice-of-law framework resulting from these reform efforts will provide parties with an expanded menu of legal regimes from which to choose when drafting their contract and, in turn, will lead to a more frequent use of choice-of-law clauses. Indeed, some have even suggested that omitting such a clause may soon become malpractice for the commercial lawyer. Given both the trend toward permitting unlimited contractual choice of law and the growing popularity of these clauses, it is worth pausing to examine how the judicial system might appropriately respond. In particular, this Article addresses a problem that has thus far been overlooked by both courts and commentators. That problem involves the gains and losses of appellate review of trial court rulings on the law of another state or nation. What, exactly, does judicial review of unsettled questions of foreign law accomplish? What is its price? These questions are of both considerable theoretical interest and immense practical importance. Their resolution calls for an inquiry into the allocation of judicial authority and in its production of outcomes in the real world. The purpose of this Article is to provide an answer to these and other questions. This Article suggests an approach to judicial review that will improve the operation of appellate courts while ap- propriately distributing authority among all levels of the judiciary