California courts generally will apply Section 187 of the Restatement Second of Conflicts of Laws when deciding choice of law questions. Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 465 (1992). Until now, it hasn't been known whether a California court will follow Section 207 which provides "The measure of recovery for a breach of contract is determined by the local law of the state selected by application of the rules".
In Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc., 2020 Cal. App. LEXIS 559, the defendant challenged an award of prejudgment interest that arguably was not available under California law. The contract at issue included a New York choice of law provision and the applicable New York statute mandates the recovery of prejudgment interest because of a breach of performance under a contract. The Court of Appeal applied Section 207 and affirmed the judgment of prejudgment interest.