April 2022

The following hypothetical situation was written by University of Michigan Law School student Joe Hillman. This blog post is to serve as an issue spotter with which our readers should please feel free to engage. Comments or subsequent blog post submissions regarding this issue spotter may address any relevant type of law or policy.

Imagine a very farfetched hypothetical. Let’s say the year is 2035 and you, a proud resident of Arizona, have purchased an autonomous vehicle with SAE Level 3 autonomous capabilities, meaning the vehicle will occasionally need you to take control and drive. While buying the car from the Delaware-incorporated company Alset, you sign an enforceable, albeit boilerplate, contract that contains a choice-of-law clause requiring the application of Delaware law to any contractual dispute. Alset is headquartered in Texas but has effectively lobbied the government of the smaller Delaware to adopt more “flexible” contract law for nationwide technology companies.

In 2037, President Pete Buttigieg signed into law the Umbrella National Autonomous Vehicle Organizations are Devious and Bear Liability Everywhere (UNAVOIDABLE) Act, which among other things, makes autonomous vehicle manufacturers liable for damages caused by an SAE Level 3 vehicle when the driver fails to retake control of their car. Accordingly, Alset’s insurance rate goes up. To lower their premiums, Alset decides to remotely shut off all SAE Level 3 vehicles, which violates their contract with you, their dear customer. You sue Alset for breach of contract in the Superior Court of Arizona. Alset does not object to the forum but calls upon the Superior Court to apply Delaware as the choice-of-law clause in the contract dictates. The 2030 amendments to Delaware’s contract law provide that “a sale contract may be voided if a change in federal regulation makes enforcement impractical to one or more parties.” That statute has always been construed liberally. What are the legal implications or unanswered questions of the aforementioned scenario?