Governing law clause
In a transaction with no foreign element involved it will not usually be necessary to specify the system of law which is to govern the transaction or the courts which are to have jurisdiction in the event of a dispute. However, where there are international aspects to the transaction, it is sensible to set out in the contract both the governing law and jurisdiction – i.e. which country’s laws govern the terms of the contract and in which country’s courts will any dispute be finally decided. A typical governing law and jurisdiction clause is as follows: This Agreement shall be governed by the laws of [insert country] and the parties submit to the [exclusive/non-exclusive] jurisdiction of the courts of [insert country] in respect of any dispute or difference between them arising out of this Agreement.