Governing Law

Common pitfalls

• 1.Silent or ambiguous clause — without an express choice, a court applies conflict-of-laws rules and picks law you never contemplated.
• 2.Governing law and forum mismatched without reason — e.g., English law with exclusive jurisdiction of Delaware courts forces a Delaware judge to apply unfamiliar foreign law.
• 3.Forum chosen for convenience of the stronger party — a small supplier agreeing to litigate in the buyer's home courts often effectively waives its remedies entirely.
• 4.Asymmetric jurisdiction clauses (one side can sue anywhere, the other is locked to a single forum) are unenforceable in several jurisdictions including France.
• 5.Choosing a law with no real connection to the deal — some jurisdictions refuse to enforce a choice of law made solely to evade mandatory rules of the law that would otherwise apply.

Frequently asked questions

What is the difference between governing law and jurisdiction?

Governing law tells a court which body of substantive rules to apply when interpreting the contract and deciding the dispute. Jurisdiction tells you which court or arbitral body actually hears the case. They are separate choices: you can have English law applied by a Swiss court, or New York law applied by an ICC tribunal seated in Paris. Sophisticated contracts address both explicitly.

Which governing laws are most common in international deals?

English law and New York law dominate cross-border commercial contracts because both have centuries of case law, predictable commercial interpretation, and sophisticated legal markets. Delaware law is the default for US corporate deals. Swiss, Singapore, and Hong Kong law are common in Asia-Pacific. The choice usually reflects where the parties have the most legal familiarity, not where they do business.

Should I accept the other side's governing law?

Not automatically. Governing law affects how your remedies work and how expensive a dispute will be to run. If the other side proposes a jurisdiction where you have no legal footprint, the practical effect is that disputes become prohibitively expensive to litigate — which means you have fewer remedies in practice than on paper. Pushing back on governing law is normal negotiating, not a sign of bad faith.