Template:M summ GMSLA 23
It is by default governed by English law (though in at least one version (namely the South African Schedule) you can convert that to a different governing law). This is a reflection of the oft-denied reality that commercial law is, to most intents and purposes, pretty much the same all over the developed world, and in much of the non-developed world, and the pathetic behavioural plea from a legal eagle that “I could not possibly opine on that because I am not qualified attorney in that jurisdiction” is basically feeble-mindedness.
This is an exclusive jurisdiction clause: cf the ISDA Master Agreement which by dint of Section 13 has a non-exclusive jurisdiction clause.
If you’ve ever despaired at the pernicketiness of governing law clauses such as this:—
This agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
Then you have the Rome II EU Regulation[1] to blame. Enacted in 2007, it applies to all EU Member States[2] and is designed to harmonise the “conflict of laws” rules across Member States[3] dealing with with non-contractual disputes.
Non-contractual obligations
In this context breach of “non-contractual obligations” includes actions based on tort (e.g. negligence), competition law and statutory duty. But, fabulously, not those arising out of the negotiable nature of bills of exchange, cheques and promissory notes and other negotiable instruments, or company law or defamation — though it’s hard to see how you could have a non-contractual obligation to defame someone.
But the main thing is to ensure any concurrent claims in contract and tort can be — must be — decided in the same forum. This is mostly interesting where the parties to a contract are in different jurisdictions, and each will prefer their own jurisdiction to hear a non-contractual dispute. But even there, frankly, a concurrent claim in tort would only be relevant in most cases to builders.
Of course, the sensible thing would be to expressly exclude tort claims under the contract. But for those not prescient enough to do that, there’s always this magic incantation.