What are the considerations when drafting a definitions and interpretation clause in a contract impacted by laws outside England and Wales?

A definitions and interpretation clause allows the parties to define any terms used throughout the agreement in one place. It is also where the parties may specify any general principles that will apply to the interpretation of the agreement. One of the areas covered is typically the interpretation of legislation and whether that is to be ambulatory (ie where legislation is to be interpreted as it is amended from time to time) or non-ambulatory (where it is to be interpreted as at a set point in time such as the date of the agreement). For an example clause, see Precedent: Definitions and interpretation clause.

There may be situations where the parties need to consider the interpretation of legislation from outside England and Wales. For example:

1. •

   if one of the parties is based outside England or Wales

2. •

   if any element of the contract is to be performed outside England and Wales (eg the supply of goods and services to a different