Choice of law clause

In contract law, a choice of law clause or proper law clause is a term of a contract in which the parties specify that any dispute arising under the contract shall be determined in accordance with the law of a particular jurisdiction. An example is "This Agreement shall be governed by, and construed in accordance with, the law of the State of New York."

A choice of law clause may be combined with a forum selection clause. The combined clause would include the choice of law that is to govern any dispute arising under the agreement and the choice of forum where disputes will be heard. Once implemented, a choice of law clause will generally be upheld by courts, as long as it is bona fide, legal, and not contrary to public policy.