Governing law and forum clause
The contract clause choosing which jurisdiction's law interprets the deal and which courts may hear disputes.
What it is
A governing law clause chooses the body of law used to interpret a contract. A forum clause chooses where disputes must be heard, such as specified state and federal courts. They answer different questions and should name the jurisdiction and forum precisely rather than saying only 'the laws where we operate.'
Reach for both clauses in any contract that crosses state or national borders. Match them to the legal entity, operations, bargaining position, and dispute process. It is why US SaaS terms so often name Delaware or California law and then pin every dispute to the courts of one named county. If the agreement uses arbitration, coordinate the court language with the arbitration seat, rules, and the courts allowed to enforce an award.
Gotcha: putting your favorite jurisdiction in the terms does not guarantee that every court will enforce it. Mandatory consumer, employment, privacy, and public-policy rules can prevail, especially where one side had no real choice. Another common error is choosing one state's law but naming courts that lack a sensible connection to either party or the transaction.
Ask AI for it
Draft a governing law and forum clause for the parties and transaction described below. Name one jurisdiction's substantive law, state whether conflict-of-laws rules are excluded, and identify the exact state and federal courts with exclusive or nonexclusive jurisdiction. Add consent to personal jurisdiction, venue, and service of process. Keep arbitration out unless the deal separately invokes the Federal Arbitration Act, and then coordinate the forum with the arbitral seat and award-enforcement courts. Add a consumer carveout for mandatory local rights, including jurisdiction protections under Brussels I Recast for covered EU consumer contracts. Mark missing entity locations and enforceability questions as bracketed TODOs for counsel.