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 New Mexico, 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 jurisdictions connected to the parties or the circumstances of the case. New Mexico courts will consider various factors such as the place where a contract was made or performed, the location of the subject matter of the dispute, the domicile, residence, nationality, place of incorporation, or place of business of the parties, and the place where a tort was committed. The courts aim to apply the law of the jurisdiction that has the most significant relationship or closest connection to the issue at hand. However, if the parties have entered into a contract that includes a choice of law provision, New Mexico courts will generally honor such agreements, provided they are not contrary to public policy or statutory directives.