Applicable law
Applicable law

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Applicable law
  • Importance of the applicable law
  • Contract disputes—parties have failed to choose the applicable law
  • Non contractual disputes–determining the applicable law
  • Hague Principles on Choice of Law in International Contracts
  • Scope of the applicable law
  • What impact does an English law clause have in the absence of a jurisdiction clause?

The UK has voted to leave the EU and this will take place on exit day as defined in section 20 of the European Union (Withdrawal) Act 2018. This has implications for practitioners considering which applicable law applies when determining a dispute. For guidance, see Practice Notes: Brexit—applicable law and No deal Brexit—applicable law.

This Practice Note explains the importance of the applicable law, also known as governing law, ie the law used to determine the dispute between parties. How the parties choose the applicable law is explained together with the consequences a failure to do so which depends on whether there is a contractual or non-contractual dispute. Also considered is the impact that a law clause may have in determining jurisdiction in the absence of a jurisdiction clause.

Importance of the applicable law

For contracts involving a cross border element, under choice of laws principles, parties to a contract can agree which law is to be applied by the courts when interpreting the contract if there is a dispute. Generally, parties have the freedom to choose the applicable law.

When dealing with cross border disputes, there may be a number of laws that may be of relevance to the parties. For example, the law of the different countries in which each party is situated or the law of the country in which