Governing law and jurisdiction clauses

Understanding governing law and jurisdiction clauses is essential for drafting commercial contracts that provide clarity and enforceability. This guidance note explores the critical role these clauses play in defining the applicable legal framework and dispute resolution forums. It covers the strategic selection and legal implications of these clauses, highlighting their impact on contract validity, enforcement, and litigation risk.

Topics Covered

• Governing law clauses
• Jurisdiction clauses
• Other drafting considerations

Essential Insights

• Assess how governing law determines contract validity, interpretation, and available remedies without exhaustive explanations.
• Recognise statutory limits that may invalidate governing law clauses attempting to override Australian Consumer Law protections.
• Consider complex jurisdiction clause types - exclusive versus non-exclusive - and their nuanced effects on dispute forums.
• Evaluate strategic alignment between governing law and jurisdiction selections to optimise enforceability and reduce litigation risk.
• Explore implications of multiple documents with inconsistent clauses and the potential for resultant disputes.
• Understand the special rules governing personal property security agreements under the Personal Property Securities Act 2009 (Cth).