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 Maryland, 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 rules. These rules are designed to resolve questions of which state or jurisdiction's substantive law should be applied when there are competing interests. Maryland courts will consider various factors, such as the place where a contract was made or where an injury occurred, the domicile or residence of the parties, and where the relationship between the parties is centered. Maryland follows the Restatement (Second) of Conflict of Laws for guidance in many areas of conflict of laws. Additionally, if the parties have a valid choice of law clause in their contract, Maryland courts will generally honor such provisions, assuming they are not contrary to a fundamental policy of the state. In cases involving federal law, federal courts may apply federal common law or the relevant state law principles depending on the nature of the dispute and the specific federal interests involved.