As deal lawyers, it’s our job to anticipate disputes. If a dispute does arise, the competence of both sides’ lawyers is immediately put to the test: in the form of a glaring spotlight on the choice of law clause. Is the dispute captured cleanly, or ambiguously? Being forced to spend legal fees on the peripheral question of applicable law is a recipe for massive client frustration.
Two important considerations in this context are (1) ensuring that the clause captures not just contract, but tort and statutory claims (including IP infringement claims in tech license and confidentiality agreements); and (2) specifies not just substantive but procedural law–especially statutes of limitations, which are often outcome-determinative.
Another drafting tip: rather than excluding all conflicts of laws principles, preserve those that support the agreed-upon choice.
Here’s work product from Redline:
The enforcement and interpretation of, and all claims or disputes arising out of or related to, this Agreement will be governed by the procedural and substantive laws of [New York], including its statute of limitations, without regard to conflicts of laws principles that would cause the application of another jurisdiction’s laws to apply.
Engage on this topic here.
___________________________
The intended audience for this post is licensed and practicing lawyers, not laypersons seeking legal advice for their situation. If you are not a lawyer, hire one before using or relying on any information contained here. This post is: (1) informational only and not intended as advertising or as solicitation for legal services, (2) not intended to render legal advice to you, and (3) not a substitute for obtaining legal advice from a qualified attorney to assess your exact situation. The information here is subject to change and may not be applicable or correct in your jurisdiction. The views and opinions expressed here are Sean’s alone and do not necessarily represent the positions of Sean’s present or former employers, law firms, or clients.