Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Applicable law definition

What does Applicable law mean? Applicable law describes the body of law that actually governs a dispute, transaction or issue in practice—either because the parties have made a valid governing law (choice‑of‑law) clause, or, absent such a clause, because conflict‑of‑laws rules select it. The term is descriptive rather than a defined statutory label and is used across contracts, tort/delict, property and regulatory compliance. In England & Wales, Scotland and Northern Ireland, if no valid choice is made, the applicable law of contractual obligations is identified under Rome I as retained EU law; for non‑contractual obligations, Rome II as retained EU law applies. In...

Governing law clauses in commercial contracts: selection, consequences of no choice, variation, territorial units, non‑national systems, floating clauses and stabilisation

Published by a LexisNexis Dispute Resolution expert

Practice notes

This Practice Note explores applicable law clauses—also called governing law clauses, proper law clauses or choice of law clauses. It explains why parties agree an applicable law clause and the key matters to weigh up. It also provides insight into circumstances in which parties may alter the applicable law clause in their contract, and considers whether floating applicable law clauses and stabilisation clauses are effective. For an introduction to applicable law, see Practice Note: Applicable law—a guide for dispute resolution practitioners. Contracts may include a single provision combining jurisdiction and applicable law. For guidance on jurisdiction clauses, see Practice Note: Jurisdiction agreements—introduction.

What is an applicable law clause?

An applicable law clause records the parties’ agreement, reached during contract negotiations, specifying which country’s laws the courts are to apply if a dispute arises between the contracting parties and proceedings are commenced that require a judicial determination. The clause should identify a national system of law to be used to resolve the dispute between the parties. A term that refers to the laws or rules of a non-state body will be invalid...

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Web page updated on 21/05/2026

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