New York law to govern: Overview, definition, and example
What is New York law to govern?
New York law to govern is a governing law clause that specifies the agreement will be interpreted and enforced according to the laws of the State of New York. It applies regardless of where the parties are located or where the contract is performed. This clause is widely used in commercial, financial, and cross-border agreements due to the predictability and maturity of New York's legal system.
Why is New York law to govern important?
It provides legal certainty by selecting a single, well-established legal system to govern the agreement. New York is often chosen because its courts have deep experience handling complex business disputes, and its commercial laws are considered sophisticated and business-friendly. Without this clause, parties risk uncertainty about which state or country's laws apply, which can lead to costly legal conflicts.
Understanding New York law to govern through an example
A European distributor signs a licensing agreement with a U.S. software company. To reduce ambiguity and limit jurisdictional disputes, the parties agree that New York law will govern the contract. If a disagreement arises, both parties know it will be resolved based on New York law, not local or foreign laws that may be unfamiliar or less predictable.
Example of a New York law to govern clause
Here’s how a New York law to govern clause may appear in a contract:
"This agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of law rules."
Conclusion
The New York law to govern clause offers predictability, credibility, and consistency. It reduces legal risk and ensures that disputes are handled under a familiar and respected legal framework. For national and international agreements alike, choosing New York law helps streamline interpretation and enforcement.
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.