In any consulting agreement, the choice of governing law is an important consideration. This clause determines the jurisdiction whose laws will be used to interpret and enforce the agreement. While this might seem like a small detail, it can have significant implications for both parties, especially if a dispute arises.
Choosing the governing law is a way for both parties to protect themselves and ensure that their rights are respected. It is also a way of setting clear expectations and understanding what will happen if there is a disagreement or legal issue.
Here are some important things to consider when drafting a “consulting agreement governing law” clause:
1. State or Country: The first decision to make is whether to choose a state or country law to govern the agreement. This will depend on the location of the parties involved and where the consulting work will be performed. If the consulting work will be done in one state, it is usually best to choose the law of that state to avoid potential conflicts of jurisdiction.
If the consulting work will be done in multiple states or countries, it might be necessary to choose a governing law that is neutral and has a well-established legal system. Often, parties will choose the law of the state or country where they are located, as this can provide a sense of familiarity and comfort.
2. Language: The governing law clause should be written in clear, concise language, and should be easily understandable by all parties. If the parties are fluent in different languages, it might be necessary to provide a translation to ensure that there is no confusion or misunderstanding.
3. Compliance: It is important to ensure that the governing law chosen is compliant with all relevant laws and regulations. This is especially important if the consulting work involves sensitive information or data, or if the parties are working in a highly regulated industry.
4. Forum: The governing law clause should also specify where any disputes will be resolved. This could be through arbitration, mediation, or litigation. It is important to choose a forum that is accessible and fair to both parties.
5. Changes: Finally, it is important to ensure that the governing law clause is flexible enough to accommodate changes in circumstances. This might include changes in the location of the parties, changes to the nature of the consulting work, or changes to relevant laws and regulations.
In conclusion, the “consulting agreement governing law” clause is a crucial aspect of any consulting agreement. It is important to carefully consider all aspects of the clause, including the choice of jurisdiction, language, compliance, forum, and flexibility. By doing so, both parties can protect their rights and ensure that they have a clear understanding of their obligations under the agreement.