GA Code § 11-1-105 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 1 - General Provisions|Part 1 - General Provisions|§ 11-1-105. Severability

 If any provision or clause of this title or application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this title which can be given effect without the invalid provision or application, and to this end the provisions of this title are declared to be severable.   (Code 1933, § 109A-1 - 105, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 1978, p. 1081, § 2; Ga. L. 1992, p. 2685, § 1; Ga. L. 1993, p. 633, § 2; Ga. L. 1998, p. 1323, § 15; Ga. L. 2001, p. 362, § 2; Ga. L. 2015, p. 996, § 3A-1/SB 65.)    The 2001 amendment,  effective July 1, 2001, substituted "Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens. Code Sections 11-9-301 through 11-9-307." for "Perfection provisions of the article of this title on secured transactions (Article 9 of this title). Code Section 11-9-103." in the sixth undesignated paragraph of subsection (2).    The 2015 amendment,  effective January 1, 2016, rewrote this Code section.   Editor's notes.   - Ga. L. 1993, p. 633, which amended this Code section, provides, in § 5, not codified by the General Assembly, that: "This Act shall become effective on July 1, 1993, for all lease contracts that are first made or that first become effective between the parties on or after that date. This Act shall not apply to any lease first made or that first became effective between the parties before July 1, 1993, or to any extension, amendment, modification, renewal, or supplement of or to any such lease contract, unless the parties thereto specifically agree in writing that such lease contract, as extended, amended, modified, renewed, or supplemented, shall be governed by this Act."   Law reviews.   - For article on choice-of-law of contracts in Georgia, see 21 Mercer L. Rev. 389 (1970). For essay on Georgia conflict of laws questions in contracts cases in the eleventh circuit and certification reform, see 11 Ga. St. U.L. Rev. 531 (1995). For note on 1992 amendment of this Code section, see 9 Ga. St. U.L. Rev. 163 (1992). For note on 1993 amendment of this section, see 10 Ga. St. U.L. Rev. 34 (1993).   JUDICIAL DECISIONS   Contracting parties may choose applicable state law.    - O.C.G.A. § 11-1-105 allows contracting parties to make their own choice of the applicable state law. Crompton-Richmond Co. v. Briggs, 560 F.2d 1195 (5th Cir. 1977).    O.C.G.A. § 11-1-105 permits parties to provide by agreement which state's law shall govern their transaction but only if transaction bears "reasonable relation" to state so designated. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981); Manderson & Assocs. v. Gore, 193 Ga. App. 723, 389 S.E.2d 251 (1989).    The parties may by contract stipulate that the law of another jurisdiction will govern the transaction. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983).   Limitation on broad choice of law rule of subsection (1).    - Broad choice of law rule provided in O.C.G.A. § 11-1-105(1) is expressly limited by O.C.G.A. § 11-1-105(2), which states that for specific matters listed therein, other conflict of laws provisions located in the Code govern; among specific exclusions from general conflicts rule are article 9 secured transactions, which prior to 1978 were governed by conflicts or situs choice of law rule provided in O.C.G.A. § 11-9-102. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981).   Conflict of laws rule of forum state determines what state's substantive law applies.   - Where question of whether lessee was entitled to prevail on its failure of consideration defense in diversity action brought for breach of lease depended upon what state's substantive law applied, it was necessary to look to conflict of laws rule of forum state. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981).   Georgia adheres to the traditional choice of law system.    - Under this system tort actions are adjudicated according to the law of the place where the wrong occurred, and contract actions are regulated by the law of the state where the contract was made when matters of execution, interpretation, or validity are at issue, and by the law of the state where it is to be performed when the issue is one concerning performance. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983).   In a products liability diversity action brought on the theory of breach of implied warranty of merchantability, Georgia procedural law, which looked to the lex loci delicti, controlled the claim. Since the injury took place in Georgia, Georgia substantive law, which required privity, was applied. The plaintiff, who was an employee of the purchaser of the product, failed to satisfy this privity requirement. Morgan v. Mar-Bel, Inc., 614 F. Supp. 438 (N.D. Ga. 1985).   Contract may bear "appropriate relation" to Georgia, though entered into in another state.   - The phrase "applies to transactions bearing an appropriate relation to this state" means, that notwithstanding a contract has been entered into in another state, if it is litigated in Georgia and bears an "appropriate relation" to Georgia, its validity will be governed by Georgia law. Gulf Collateral, Inc. v. Morgan, 415 F. Supp. 319 (S.D. Ga. 1976).    "Appropriate relation,"  which means essentially the same as "significant contacts," is something more than minimum contacts. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981).   Sale-leaseback agreement.   - Absent effect designation, substantive law applied to sale-leaseback agreement is determined by "appropriate relation" test. United Counties Trust Co. v. Mac Lum, Inc., 643 F.2d 1140 (5th Cir. 1981).   Defective hand grenade bought in another state but injuring citizen in Georgia.    - Where plaintiff, a Georgia citizen who was injured by explosion of a defective hand grenade at an army base in Georgia, brought suit pursuant to O.C.G.A. § 9-10-91 against the hand grenade's manufacturer which was allegedly doing business in the State of Georgia, the transactions in which defendant manufactured and sold the defective hand grenades to the United States Army in the States of Tennessee and Texas, were "appropriately related" to the State of Georgia within the meaning of O.C.G.A. § 11-1-105. Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010 (5th Cir. 1969).   Repossessions of collateral located in Georgia.    - Absent an agreement that the law of another state shall govern, Georgia law applies to the repossession, resale, and right to a deficiency judgment where the collateral was located in Georgia at the time of the repossession and resale. Lewis v. First Nat'l Bank, 134 Ga. App. 798, 216 S.E.2d 347 (1975).   Unilateral reservation of rights in endorsing draft.    - In a tort action in Georgia, where defendant's insurer, a Florida corporation, tendered to plaintiff a draft payable through a Florida bank and plaintiff crossed out the printed endorsement/release before endorsing the draft to a body shop and added a handwritten endorsement reserving defendant's rights, the lex fori, i.e., the law of Georgia, should be applied where both parties are Georgia residents, since the relationship of the insurer to the parties and the action is that of defendant's agent for the payment of a sum or sums due plaintiff under the terms of the contract of insurance between defendant and the insurer and the collecting bank is the agent of the insurer. The residence of the agent or subagent is irrelevant, absent special circumstances. Wallace v. Harrison, 166 Ga. App. 461, 304 S.E.2d 487 (1983).   Foreign jurisdiction's applicable law.   - Where consignment agreement between foreign, debtor-aviation company and domestic aerospace corporation provided for its construction in accordance with the laws of the Province of Ontario, Canada, and the consignment transaction bore a reasonable relationship to Ontario, the court applied Ontario law to determine the validity and effect of the parties' interests. ATG Aerospace, Inc. v. High-Line Aviation Ltd., 149 Bankr. 730 (Bankr. N.D. Ga. 1992).    Cited in  Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975); Moore v. Emery (In re Am. Steel Prod., Inc.), 203 Bankr. 504 (Bankr. S.D. Ga. 1996).   RESEARCH REFERENCES   Am. Jur. 2d.   - 15A Am. Jur. 2d, Commercial Code, §§ 11 et seq., 41 et seq., 75. 16 Am. Jur. 2d, Conflict of Laws, §§ 2, 55. 67A Am. Jur. 2d, Sales, §§ 963-970, 981-985. 68A Am. Jur. 2d, Secured Transactions, §§ 8, 9.   C.J.S.   - 17 C.J.S., Contracts, § 13 et seq. 21 C.J.S., Courts, § 204.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 1-105.   ALR.    - Duty of one selling interest in property to another with view to their mutual exploitation of it to disclose what property cost him, 10 A.L.R. 193.    Conflict of law as to conditional sales of chattels, 25 A.L.R. 1153; 57 A.L.R. 535; 87 A.L.R. 1308; 148 A.L.R. 375; 13 A.L.R.2d 1312.    Law of the forum as governing the right to and rate of interest as damages for delay in payment of money or discharge of other obligations, 78 A.L.R. 1047.    Federal constitutional provisions as affecting right of court of forum, when entertaining jurisdiction of action on foreign contract or cause of action, to refuse, on ground of its own public policy or local statute, to give effect to provisions of the contract valid by its proper law or to other rights or obligations available under that law, 92 A.L.R. 932.   Conflict of laws as to chattel mortgages and conditional sales of chattels, 13 A.L.R.2d 1312.   Conflict of laws as to disposition of and relative rights to bank deposits in the names of more than one person, 25 A.L.R.2d 1240.   Law governing assignment of wages or salary, 1 A.L.R.3d 927.   Statute of frauds and conflict of laws, 47 A.L.R.3d 137.   What constitutes "reasonable" or "appropriate" relation to a transaction within the meaning of Uniform Commercial Code § 1-105(1), 63 A.L.R.3d 341.   Choice of law as to applicable statute of limitations in contract actions, 78 A.L.R.3d 639.   Choice of law as to application of comparative negligence doctrine, 86 A.L.R.3d 1206.   Conflict of laws as to validity and effect of arbitration provision in contract for purchase or sale of goods, products, or services, 95 A.L.R.3d 1145.