Lesson 2

Question 1

Why are governing law and jurisdiction important in international contracts?

Answer 1

They determine how the contract is interpreted, enforced, and what rights and remedies are available to the parties.

Question 2

What is the difference between governing law and jurisdiction?

Answer 2

• Governing law defines the substantive rules applicable to the contract.
• Jurisdiction determines which court or tribunal will handle disputes.

Question 3

What are the two main types of law in contracts?

Answer 3

• Mandatory law (ius cogens) – cannot be overridden
• Dispositive law (ius dispositivum) – can be altered by agreement.

Question 4

What are some common examples of mandatory law?

Answer 4

• Consumer protection
• Human rights
• Product safety
• Minimum wage
• Public policy rules.

Question 5

What happens if no governing law or jurisdiction is chosen in a contract?

Answer 5

Applicable rules will be determined by conflict of laws rules such as:
• Rome I Regulation (for EU contracts)
• Brussels Ia Regulation
• National law (fallback).

Question 6

What should be considered when choosing a jurisdiction?

Answer 6

• Neutrality
• Familiarity with legal system
• Predictability of outcome
• Enforcement possibilities
• Procedural efficiency.

Question 7

What are key strategies in choosing governing law?

Answer 7

• Select a system with clear rules
• Prefer systems that recognize freedom of contract
• Consider alignment with contract language and industry practice.

Question 8

What is a sample jurisdiction clause?

Answer 8

“Each party irrevocably submits to the exclusive jurisdiction of the courts of [State/City] for the resolution of any dispute arising out of this Agreement.”

Question 9

What is a sample governing law clause?

Answer 9

“This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of law principles.”