Choice of law and juristiction Flashcards
(21 cards)
What is the difference between governing law and jurisdiction?
Governing law tells you which legal rules apply to the contract. Jurisdiction tells you which court or tribunal will hear disputes.
Example: A contract could be governed by French law and disputes handled by courts in London.
Why should every international contract include a governing law clause?
To avoid uncertainty and legal battles over which country’s rules apply.
Example: Without it, one side may claim German law applies, the other says Greek law.
Why is a jurisdiction clause important?
It ensures disputes go to a court (or tribunal) both parties expect — avoiding surprise lawsuits in foreign courts. Example: Without a clause, a Spanish company could be sued in Polish court without expecting it.
What happens if there’s no choice of law clause?
Courts apply default rules (e.g. Rome I), usually picking the law of the service provider’s country or closest connection.
What if there’s no jurisdiction clause?
Courts use rules like Brussels Ia or Lugano to decide which court has authority — but it may surprise the parties.
What is a typical governing law clause?
“This Agreement shall be governed by the laws of [country].”
What is a typical jurisdiction clause?
“The courts of [city/country] shall have exclusive jurisdiction over disputes arising from this contract.”
Can you choose different countries for law and courts?
Yes — but it may create problems if the judge isn’t familiar with foreign law.
Example: Italian law + Dutch courts is legal but risky.
What is arbitration?
A private dispute resolution method where parties agree to let arbitrators decide instead of going to court.
What is the New York Convention?
A treaty that makes arbitration awards enforceable in over 170 countries.
What is the Hague Choice of Court Convention?
A treaty that ensures exclusive jurisdiction clauses are respected and judgments are enforced across borders.
What’s the difference between exclusive and non-exclusive jurisdiction?
Exclusive: Only one court can hear the dispute.
Non-exclusive: Other courts may also be allowed.
What is a “split clause” and why is it risky?
A clause that sends different types of disputes to different forums. Risky because it can cause confusion. Example: “Technical disputes go to arbitration, legal ones to court.”
What is a neutral forum clause?
A clause that chooses a court or arbitrator from a third country to avoid bias.
Example: English law and London arbitration between an Italian and Greek party.
How does choice of law affect interpretation of contract terms?
Different countries may treat the same clause differently.
Example: Force majeure may be implied in French law, but must be written in English law.
What is “forum shopping”?
When a party chooses the most favorable court — often avoided by agreeing on jurisdiction in advance.
What’s the safest choice for governing law and jurisdiction in a cross-border deal?
A neutral, experienced legal system with reliable enforcement.
Explain why choice of law and jurisdiction clauses are important in international contracts.”
They avoid costly uncertainty and protect both parties by setting clear rules for legal disputes. Without them, parties risk being sued in unexpected courts or under unfamiliar laws.
What is national law?
The law created and enforced by a specific country. It governs contracts unless the parties choose something else.
Example: A contract between two German firms may be governed by German civil code.
What is transnational law?
Law that crosses borders and is not tied to one country — includes trade rules, model laws, and customs. Example: Ole Lando’s Principles of European Contract Law (PECL) or ICC model clauses.
What is supranational law?
Law that comes from a body above national governments — it binds member states.
Example: EU Regulations like Rome I or Brussels Ia.
