When there is more than one state, or more than one jurisdiction (state court, federal court) with a significant relationship to the parties and circumstances involved in a lawsuit or dispute, the question may arise as to which state or jurisdiction’s laws will govern the lawsuit or dispute. The body of law that determines what law governs a dispute is called conflict of laws and consists of legal principles courts use to determine which state or jurisdiction’s law applies—unless the parties to a dispute have agreed (usually in a contract) on what law will apply.

In Alabama, as in other states, the issue of which jurisdiction's laws apply to a lawsuit or dispute is governed by the principles of conflict of laws, also known as choice of law. When a case involves parties or elements from different states or jurisdictions, Alabama courts will analyze various factors to determine which state's laws should apply. These factors may include the location where a contract was signed or where a tort occurred, the residency or place of business of the parties involved, and the nature of the legal issue at hand. Alabama follows the 'most significant relationship' test, which assesses which state has the most substantial connection to the issue. However, if the parties have a valid choice of law agreement within a contract, Alabama courts will typically honor that agreement, provided it does not conflict with a fundamental policy of the state. It's important to note that in matters where federal law is implicated, federal courts may have jurisdiction, and federal law may preempt state law under the Supremacy Clause of the U.S. Constitution.