Governing law clause: Copy, customize, and use instantly
Introduction
A governing law clause clarifies which state or country’s laws will apply to interpret and enforce a contract. It helps avoid confusion by clearly defining the legal framework for the agreement. This is especially important when the parties are in different states or countries, as it prevents disputes over which laws should apply.
Below are governing law clause templates for different scenarios. Copy the one you need, customise it, and add it to your contract.
Neutral governing law clause
This clause specifies the governing law without favoring either party’s jurisdiction.
This agreement will be governed by, and interpreted according to, the laws of [insert state/country], without regard to its conflict of laws rules.
International governing law clause
For agreements involving parties in different countries, this clause clarifies the governing law and excludes international conventions where necessary.
This agreement will be governed by, and interpreted according to, the laws of [insert country/state]. The United Nations Convention on Contracts for the International Sale of Goods (CISG) does not apply.
Flexible governing law clause
This clause allows the parties to decide on the governing law at a later time, adding flexibility to the agreement.
This agreement will be governed by, and interpreted according to, the laws of the jurisdiction agreed upon in writing by the parties. If no agreement is reached, the laws of [insert state/country] will apply.
Arbitration-specific governing law clause
This clause ensures arbitration proceedings are governed by a specific set of laws, useful for resolving disputes outside of court.
This agreement will be governed by, and interpreted according to, the laws of [insert state/country]. Any disputes arising under this agreement will be resolved exclusively through arbitration in accordance with the rules of [insert arbitration body], and the laws of [insert state/country] will govern the arbitration process.
Temporary governing law clause
For short-term agreements, this clause sets a temporary governing law with an option to renegotiate.
This agreement will be governed by, and interpreted according to, the laws of [insert state/country] for a period of [insert time period]. After this period, the parties agree to renegotiate or reassign governing law based on their operational requirements.
Governing law with mediation clause
This clause combines governing law with mandatory mediation to encourage dispute resolution before litigation.
This agreement will be governed by, and interpreted according to, the laws of [insert state/country]. Before initiating litigation, the parties agree to resolve disputes through mediation under the laws of [insert state/country], in accordance with the rules of [insert mediation body].
Governing law with escalation process clause
This clause specifies a process for escalating disputes before applying the governing law, such as internal discussions or third-party review.
This agreement will be governed by, and interpreted according to, the laws of [insert state/country]. The parties agree to attempt resolution through internal escalation processes or third-party review before initiating any formal legal proceedings under the applicable laws.
Split governing law clause
This clause applies different governing laws to distinct sections of the agreement, suitable for complex or multi-faceted contracts.
This agreement will be governed by the laws of [insert state/country] for all general provisions. However, [specific sections, e.g., “intellectual property”] will be governed by the laws of [insert secondary state/country].
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.