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What is a jurisdiction provision?

A jurisdiction clause is commonplace in many business contract scenarios. These clauses state that involved parties have the right to settle disputes through adjudication.

How do you choose a choice of law clause?

In determining the choice of law, parties may consider the types of dispute which could arise from their agreement, whether the law will be from a common or civil law jurisdiction, how friendly or hostile a jurisdiction would be to their claim, and whether sufficient precedent exists in that jurisdiction.

Can you choose any governing law?

Parties are free to choose either one or multiple applicable legal systems for their contract. They could also choose different laws for different aspects of the contract. The governing law of the contract dictates legal requirements such as formation, performance, and termination of the contract.

What does governing law mean in a contract?

Governing law is a contractual provision (also known as a choice of law provision) that determines which law shall apply in the event of a dispute. Such a clause is generally honored by the courts which do not interfere with the agreement of the parties regarding the applicable law.

Why is governing law in a contract important?

Governing law can be important because a dispute may hinge on differences in local laws. However, the parties in a contract are not necessarily bound to where they live or where the contract is signed. A governing law provision allows the parties to agree to use a particular states laws to interpret the agreement.

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