controlling law

Controlling law refers to the body of law a court will apply in resolving a dispute. Because states have widely different substantive laws, identifying which law is controlling can determine the outcome of a case. The term most often appears in contracts.

The controlling law is either the law of the state where the court sits or the law chosen through that state’s conflict of law rules. A forum selection clause determines the jurisdiction where litigation may be brought, but it does not itself select the controlling law. By contrast, a choice of law clause allows the parties to designate in advance which state’s law will govern disputes under the contract.

Parties use choice of law provisions to avoid uncertainty, reduce litigation costs, and sometimes take advantage of favorable legal environments. For example, some jurisdictions are regarded as more favorable to insurance companies, influencing where those companies choose to organize or litigate.

[Last reviewed in August of 2025 by the Wex Definitions Team]

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