governing law

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Governing law is a contractual provision (also known as a choice of law provision) that determines which law shall apply in the event of a dispute. Such a clause is generally honored by the courts which do not interfere with the agreement of the parties regarding the applicable law. The governing law provision is commonly used by parties residing in different jurisdictions to ensure that one party does not have an advantage over each other party.

[Last updated in January of 2022 by the Wex Definitions Team]