Q&As

What factors impact the choice of English law as the governing law for a new agreement which will directly impact upon the operation of existing agreements subject to other governing law choices?

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Published on LexisPSL on 20/01/2021

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • What factors impact the choice of English law as the governing law for a new agreement which will directly impact upon the operation of existing agreements subject to other governing law choices?
  • Choosing the governing law of an agreement
  • Local legal advice
  • Impact of the new agreement upon the existing agreements

What factors impact the choice of English law as the governing law for a new agreement which will directly impact upon the operation of existing agreements subject to other governing law choices?

By way of example, is it possible to have a master sale and purchase agreement governed by English law pursuant to which one party agrees to assign or transfer its interest under a series of loan/security agreements, where some of the underlying agreements are governed by a law other than English law?

This Q&A focuses only on the factors impacting the choice of governing law for the new agreement and does not consider how that new agreement might impact the security for the loans.

Choosing the governing law of an agreement

Generally, parties have the freedom to choose the applicable law of an agreement. Provided the parties choose a country’s law to govern an agreement and choosing that country’s law is not prohibited for some reason, the chosen country’s law will govern that agreement. For example, if English law is chosen to govern a master sale and purchase agreement that impacts on other loan agreements each governed by different laws, and choosing English law is not prohibited for some reason, then the master sale and purchase agreement will be governed by English law.

As a matter of English contractual law, the illustrated example should be possible and

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