Governing Law


Optional (see Notes section below)

Additional information

This clause should be included to ensure the parties are aware which jurisdiction’s laws will govern the terms and conditions of the Contract.  The issue of applicable law and jurisdiction is more significant if elements of the contract will be performed oversea and/or one of the parties is a foreign entity.

Separate text to agree in advance in which jurisdiction legal proceedings are to be commenced has not been included. This enables the court jurisdiction for the hearing of proceedings relating to the Contract to be decided by the parties at the time proceedings are commenced, subject to the operation of the general law. 

It is common for Commonwealth agencies to use the Australian Capital Territory as the default jurisdiction for most contracts but another jurisdiction could be used if more appropriate.  Issues to consider if using a different jurisdiction include:

  • Location where the bulk of the Contract will be performed
  • Location of the Customer and/or where ‘delivery’ will take place
  • Location of the Supplier

This clause does not address compliance by the Supplier with applicable laws. This is addressed in a different clause.


Governing Law

X.1    The laws of the Australian Capital Territory apply to the Contract. 

X.2    The courts of the Australian Capital Territory shall have non-exclusive jurisdiction to decide any matter arising out of the Contract.


While use of this clause is optional, it is usual for contracts to include a clause of this type.  Standardisation of contractual text results in efficiencies for both Parties to a contract but before using a particular clause, procurement officials should consider the context of their procurement.

Legal advice should be sought where a party is proposing that the laws of a foreign jurisdiction should apply and/or that the courts of a foreign jurisdiction will have jurisdiction to decide disputes. Legal advice should also be sought where the contracting party is located in a foreign country as it may be necessary to amend the Contract to address a range of other issues (e.g. excluding the application of the UN Convention on Contracts for the International Sale of Goods). Otherwise, where this clause is included, the clause wording should be used without change.

Terms that are capitalised may need to be changed to align with the Contract terminology.

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