There are many ways to draft a governing law clause. For our purposes, and to keep things manageable, we will focus on three types of governing law clauses, which will be referred to as: 1) simplified, 2) excluding, and 3) combined clauses. 

A simplified governing law clause names a governing law jurisdiction, such as Ontario or New York state. It is “simple” in that it is usually short and contains one concept – naming a jurisdiction. Examples of such clauses are:

• This Agreement may be governed by and construed in all respects in accordance with the laws of the State of Texas, U.S.A.
• This Agreement and any claim, dispute or conflict related to or arising under this Agreement, shall be governed by, and construed and interpreted in accordance with, the laws of the Province of Ontario.

An excluding clause goes a step further. Since the laws of a jurisdiction include its conflict of laws rules, excluding clauses contain two concepts: 1) name the governing law, and 2) exclude that jurisdiction’s conflict of laws rules.  Examples of excluding clauses are:

• This Agreement shall be governed, controlled and interpreted under the law of the State of Arizona, excluding its conflict or choice of law provisions.
• This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario, without giving effect to the conflict of laws principles thereof.

Finally, combined clauses contain both a governing law and forum clause in one, such as these:

• This Agreement shall be governed by and construed in accordance with the laws of Ontario, and the parties irrevocably attorn to the jurisdiction of the court in Toronto, Ontario, Canada.
• This Agreement is governed by the laws of the Province of Ontario, excluding its conflict of laws principles, and the parties irrevocably submit to the exclusive jurisdiction of the courts in the Province of Ontario.

While these are not fulsome clauses, they or ones similar to them have been interpreted by courts.  Therefore, they provide some precedential value. 

When choosing the type of clause that is best for your contract, you may want to consider what is commonly used:

• in your organization or previous deals, 
• in the applicable industry, 
• in situations similar to yours, and
• to provide predictability of interpretation. 

Wording such as exclusive or non-exclusive jurisdiction, and using the terms “attorn” and/or “submit” should also be considered when drafting your forum clause. Finally, it should be kept in mind that a court may interfere in your choice of governing law if it is not bona fide, illegal or is against public policy. Similarly, if a party can show “strong cause” why the choice of forum should not be applied, a court may interfere in that choice as well.