Governing Law and Jurisdiction Clauses: Overview (Cross-Border)

by Practical Law Dispute Resolution

A Practice Note exploring the key features of governing law and jurisdiction clauses within the context of cross-border commercial contracts. This Practice Note explains why parties should carefully nominate the law that will govern their contractual relationship and the specific courts that will have jurisdiction to resolve any disputes. It outlines critical factors for selecting an appropriate governing law and forum, addressing the formal requirements for validity and the importance of covering non-contractual claims. The Note also examines different types of jurisdiction clauses, such as exclusive, non-exclusive, and one-way asymmetrical agreements, and discusses potential enforcement issues. Key international frameworks, including the Hague Convention on Choice of Court Agreements and the EU's Recast Brussels Regulation, are considered. This Practice Note provides essential guidance on drafting these clauses effectively to achieve certainty and mitigate the risks of costly satellite litigation over applicable law and venue.