Conflict of laws occurs when there are several possible laws that could apply, and those laws mandate different results. For example, if an accident occurs within a state, state law usually applies. If both parties were residents of a different state, however, an argument could be made that the law of the state in which they live applies.
When two laws conflict, the court must decide which law should apply. There are formal organized rules in place in the legal system, called conflict of laws rules, which help a court make a determination on which law to apply in a given situation. The court first must settle these conflict of law questions before beginning to hear the merits of the case and deciding on a resolution to the dispute.
Many different types of conflict of laws exist. For example, federal law may differ from state law. The law of one state may also differ from the law of another state. A classic example is that some states have legalized the use of medical marijuana, even though federal law still prohibits it, resulting in considerable confusion for all concerned.
Conflict of laws issues occur most often when a case that arises under state law is heard in federal court under diversity jurisdiction. When two people from different states have a legal dispute, that case can be heard and resolved in federal court instead of state court. This is true even if the case is based on, state law, because the courts want to ensure a fair trial, and don't want a potentially biased state court making the decision.
The federal court hearing the case must therefore decide which state law should apply in the given situation. In order to do this, conflict of laws rules apply. These conflict of law rules are geared towards helping the court to decide which lawmaking body has the strongest interest in the resolution of the case, in order to determine which law applies.
For example, states are considered to have a paramount interest in what happens to property between their borders. Therefore, if two parties are disputing who owns land in Nevada, even if neither the plaintiff nor the defendant is from Nevada, Nevada law will apply. This becomes a bit more confusing when it comes to other areas of law, such as contract law.
For example, a contract may be made in one state, but the actions involved in the contract carried out in another. The issue may arise as to whether to apply the law of the state where the contract was made, or the law of the state where the contract is carried out. Conflict of laws issues also exist in divorce law, family law, and many other fields of law.
Conflict of law issues do not mean that the case is actually heard in the court whose law applies. For example, if the federal court determines that Ohio law will decide a dispute, the case does not go to Ohio to be heard. Instead, the federal court will hear the case, but will apply Ohio law to decide the outcome.