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Governing law: Difference between revisions
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You could make the argument that the governing law clause is just that: a pretext to run back to ''maman''. It speaks to everything that is wrong about the modern [[legal eagle]]’s approach to a commercial contract. If you take it that a ''good'' contract is one that has been so well drafted that no dispute could arise under it, then a good contract will ''never'' be [[Writing for a judge|read within the walls of a courtroom]], and so a [[governing law]] clause ought to be entirely unnecessary. A [[Consensus ad idem|meeting of minds]] is a [[meeting of minds]], whether you are in London, Amsterdam or Timbuktu. It sends the wrong message to even talk about what laws govern the contract. It shouldn’t matter, unless one is anticipating jurisdictional arbitrage of some kind. Failing that, it is some kind of tacit acknowledgement that one has drafted a ''bad'' contract, that might need an independent arbitrator to figure out what the parties intended. | You could make the argument that the governing law clause is just that: a pretext to run back to ''maman''. It speaks to everything that is wrong about the modern [[legal eagle]]’s approach to a commercial contract. If you take it that a ''good'' contract is one that has been so well drafted that no dispute could arise under it, then a good contract will ''never'' be [[Writing for a judge|read within the walls of a courtroom]], and so a [[governing law]] clause ought to be entirely unnecessary. A [[Consensus ad idem|meeting of minds]] is a [[meeting of minds]], whether you are in London, Amsterdam or Timbuktu. It sends the wrong message to even talk about what laws govern the contract. It shouldn’t matter, unless one is anticipating jurisdictional arbitrage of some kind. Failing that, it is some kind of tacit acknowledgement that one has drafted a ''bad'' contract, that might need an independent arbitrator to figure out what the parties intended. | ||
I am not suggesting much less expecting any [[legal eagle]] to give up on a | I am not suggesting much less expecting any [[legal eagle]] to give up on a comfort blanket as cosy as a [[governing law]] clause, but it is a worthwhile thought experiment. | ||
===Inhouse [[legal eagle]] shop steward opportunity=== | ===Inhouse [[legal eagle]] shop steward opportunity=== | ||
The proposed governing law not being the one in which '' | The proposed governing law not being the one in which ''l’[[aigle juridique]]'' is qualified and licensed to practice is a ''magnificent'' opportunity for a busy [[in-house lawyer]] to work to rule, shunting a dreary job off his desk by lateral [[escalation]] onto Helmut’s desk, which sits in your Frankfurt office. | ||
“This agreement is governed by German law. I simply cannot opine,” he will say, and look airily towards the work-shy [[rechtsadler]]. “Helmut will have to advise.” | |||
Now, there ''is'' a veneer of truth about this — a sheen of cover, ''just'' thick enough to rebuff non-specialist [[salespeople]] who may be disinclined to believe it: they will harbour the suspicion that the basic precepts of the commercial bargain are, as far as makes any difference, the same whatever legal regime governs them, and that the present lawyer is simply being truculent, lazy or obtuse. But she cannot prove this and is not able to second guess it, either. Rather brilliantly, nor can the lawyer — nor, for that matter, can Helmut (assuming you can get a response out of him at all). Each legal has a distinct magisterium of expertise, and none overlaps: unless someone happens to be dual-qualified, ''no-one'' has sight of German law, English law, and the intended bargain unprejudiced enough to confirm beyond reasonable doubt that ''which governing law you use won’t make a fig of difference''. | |||
But I can let you in on a secret: if your agreement is an NDA, it won’t. | |||
But — unless you’re planning to litigate your contract and, day 1, if you are, you have bigger problems — you might be better applying your energies to devising an agreement that is clear and unambiguous to both parties in the first place./ | |||