Other Issues in Selecting the Governing Law Sample Clauses

Other Issues in Selecting the Governing Law. ‌ Choice-of-law clauses may also attempt to stabilize the host law applicable to the parties’ agreement or relationship. One formulation is to provide that the law of the host State applies as it exists on the date of the contract signing. Another is to state in the agreement the specific laws of the host State that will apply rather than including a clause adopting the host State’s law generally. A modern stabilization clause generally does not attempt to freeze the law applicable to the parties but, instead, may provide that if the host State’s laws or regulations change in a way that significantly affects the economic equilibrium of the contract, then the private party has a right to a modification of the financial terms to maintain the original economic equilibrium. The law related to stabilization and equilibrium clauses can be particularly complicated and parties using such clauses should therefore ensure that they are guided by the advice of experienced legal counsel when they incorporate such clauses in their dispute resolution provision. Finally, it should be kept in mind that parties’ choice of the substantive law to govern any disputes between the parties will not necessarily cover all issues. Issues such as the parties’ capacity to enter into a contract, disregard of the corporate form, and bankruptcy may be subject to other law. In addition, some countries with a close connection to the parties or the transaction may have mandatory rules of law that apply, regardless of the parties’ choice of law or intent. Other issues may be covered by treaty, such as bilateral or multilateral investment treaties or by customary international law, all of which apply to investment disputes relating to such matters as expropriation and currency transfers.