New York Law (NYLE) Practice Exam

When determining liability in a case arising from conduct specifically regulated by the law of State X, what law governs?

1. Federal law

2. Common law of New York

3. State X law

4. No applicable law exists

The correct answer is: State X law

In a case where the conduct is specifically regulated by the law of State X, the governing law would be the law of State X itself. This is based on the principle of lex loci, which posits that the law of the jurisdiction where the conduct occurred should be applied. Because State X has specific regulations governing the conduct in question, these regulations take precedence in determining liability. Applying State X law ensures that the legal standards and requirements that apply directly to that conduct are correctly utilized, reflecting the intent of the legislature in that state. Other options, such as federal law or the common law of New York, would not apply unless there was a clear indication that federal standards superseded State X’s regulations or if the conduct had significant connections with New York that might justify its law’s application. In this scenario, as the conduct is regulated explicitly by State X's law, that law must govern the determination of liability.