Governing law and jurisdiction clauses

by Practical Law Dispute Resolution

A practice note that explains, from an English law perspective, the critical importance of including governing law and jurisdiction clauses in commercial contracts. This practice note outlines the key factors for parties to consider when selecting and drafting these provisions to avoid costly and lengthy disputes. It explores the legal frameworks that determine the applicable law, such as the Rome I Regulation and its post-Brexit successor, UK Rome I, and discusses circumstances in which the chosen law may be modified. Furthermore, this Practice note examines the rules that determine jurisdiction, including the common law rules and the 2005 Hague Convention on Choice of Court Agreements. It analyses the practical implications of different types of jurisdiction clauses, such as exclusive, non-exclusive, and asymmetrical (or one-way) clauses, and considers their enforceability, particularly in a post-Brexit landscape, as well as the challenges presented by competing clauses in related agreements. The note also touches upon provisions for service of process.