Under contract choice of law, when a contract includes a choice-of-law clause selecting NY law because the amount involved is over $1 million, which statement is true?

• A. The clause is invalid due to unreasonableness
• B. NY law may be chosen only if NY's forum is used
• C. The clause is effective if there is substantial connection with NY
• D. NY law may be chosen for any amount

Answer: (C)

Choice-of-law clauses are enforced when the state chosen has a substantial connection to the contract or the parties. The amount involved isn’t the controlling factor; a large sum doesn’t automatically invalidate the clause. If there’s a meaningful link to New York—such as the contract being negotiated in New York, most of the performance occurring there, or the parties having significant ties to New York—the court will apply New York law to interpret and enforce the contract. Therefore, the clause is effective if there is a substantial connection with New York.