If you look through the general conditions (or back page provisions) of your standard construction contract, you might be surprised to see a “choice of law” provision. This provision is a term in the contract that states that the law of another jurisdiction applies to disputes arising from the work performed or obligations incurred under the construction contract. For example, a construction contract for a house being built in Portland, Oregon could contain a provision that in the event of a dispute between the owner and builder, Washington law will apply. A choice of law provision may be included for a variety reasons such as an out-of-state contractor, or an out-of-state developer, the parties’ use of an unreviewed, standard form contract, or more favorable laws for the drafting partyin other jurisdictions. Whatever the reason, for projects built in Oregon, cherry-picking the law of another state is off the table.
Disputes arising from construction contracts for work performed primarily in Oregon will always be decided under Oregon law. In fact, where a construction contract includes any provision that requires the application of the law of another state, that provision is void and unenforceable. This applies not only to cases brought in Oregon state courts, but it also applies to arbitrations or other dispute resolution proceedings. Because the state of Oregon has an interest in applying its own laws to buildings built in Oregon and occupied by Oregonians, the Oregon legislature has resolved choice of law conflicts in construction contracts by favoring Oregon law. Therefore, regardless of what the contract says, if your project is in Oregon, Oregon law will apply.
Although it is still imperative to have an attorney fully review your construction contracts to ensure that you are not limiting or restricting your rights in other ways, as far as choice of law is concerned, Oregon has you covered.