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A governing law and choice of forum clause deals with two distinct issues: (1) the choice of law that is to govern any dispute arising under the agreement; and (2) the choice of forum where disputes will be heard. These issues are often dealt with in a single provision but can also be dealt with separately. Choice of Law
A governing law clause is a critical component of contractual agreements, serving to define the legal framework that will apply to the contract. Key elements include the definition and purpose of the clause, the criteria for selecting the appropriate jurisdiction, and considerations for enforceability.
Feb 15, 2016 · As a rule, if the choice of governing law in a contract is bona fide and legal, and if there is no reason for avoiding the choice on public policy grounds, the choice of law specified by the parties in a governing law clause will be upheld by the courts as the proper law of the contract. 3
The parties' choice of governing law will usually be upheld by courts in countries with developed legal systems. 1 It follows that, by inserting a governing law clause, parties achieve certainty: they know what law is likely to be applied to determine questions regarding their rights and obligations under the contract. This, in turn, allows them to analyse their legal position with confidence.
Article 3(3) of the Rome I Regulation is an exception to the general rule that a choice of governing law clause in a contract will be upheld. It provides that where all other elements relevant to the situation at the time of the choice of law are connected with one country only, the mandatory laws of that country shall apply despite the choice of law of a different country.
Apr 13, 2011 · Therefore, any contract you enter into should incorporate a clearly drafted governing law clause stating expressly the substantive law that will govern the rights and obligations of the parties to that contract. Governing law clauses and choice of jurisdiction. In most jurisdictions, an express choice of law will be upheld by the courts.
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Jan 1, 2023 · Governing law and choice of jurisdiction (ie, venue for resolution) clauses are generally upheld by state and Federal Courts in commercial contracts, provided such choice of law does not, and will not, avoid any mandatory law (eg, the ACL for consumer contracts) that would otherwise be applicable.
