Actually, New York law is pretty much the world standard for international commerce. Foreign law is applied regularly in many courts, for instance inquiring if a marriage is valid.

At least in the US, the fact that a contract states it is governed by the laws of a particular state doesn't mean that you have to actually go to court in that state. For instance, the lawsuits between SCO and IBM, and SCO and Novell were heard in Utah, although in some cases New York or Delaware law applied (because some of the contracts involved had choice of laws provisions).

For what it's worth, the chance that a random US judge will apply another state's laws correctly, or even coherently, is pretty slim.