Opinion ID: 2156289
Heading Depth: 2
Heading Rank: 1

Heading: Choice of Law for Determination of Contract Formation

Text: [¶ 7] The agreement provides: THIS AGREEMENT AND ANY SALES THEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAWS RULES. When a contract contains a choice of law provision, we generally will interpret the contract under the chosen state's laws. Schroeder v. Rynel, Ltd., 1998 ME 259, ¶ 8, 720 A.2d 1164, 1166 (citing RESTATEMENT (SECOND) CONFLICTS OF LAWS § 187(2) (1971)). Where, as here, a contract involving interstate commerce contains an arbitration provision, the FAA governs. See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 269, 271-72, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). In such situations, the FAA ordinarily preempts state law. Id. at 272, 115 S.Ct. 834. In deciding whether an arbitration clause is enforceable in the first place, however, courts apply state contract law principles. See 9 U.S.C.A. § 2 (1999); 14 M.R.S.A. § 5928(1); see also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967); Patrick v. Moran, 2001 ME 6, ¶ 5, 764 A.2d 256, 257; In re Palm Harbor Homes, Inc., 129 S.W.3d 636, 641-42 (Tex.App.2003). Accordingly, we rely on Texas law in deciding whether Stenzel and Gerber are bound by the arbitration clause. [¶ 8] Stenzel and Gerber assert that we should not apply the Texas choice of law provision in deciding whether an arbitration agreement exists because that presupposes the existence of a valid contract. They also observe, however, that there do not appear to be any significant differences between the laws of Texas and Maine on this score. Stenzel and Gerber do not contend that the Superior Court erred by adhering to the agreement's choice of law provision or that they were harmed as a result. Accordingly, we assume, without deciding, that the agreement's choice of law provision controls and that Texas law governs the determination of all of the issues presented by this appeal.