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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I am about to enter an agreement with a US company and it states

Resolved Question:

I am about to enter an agreement with a US company and it states US law applies is this correct or should it be UK law
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

Its a matter of negotiation

Alex Watts :

It can be US law or UK law

Alex Watts :

They clearly want US law as if there is a dispute they want to be able to litigate there.

Alex Watts :

I assume you want UK law in case there is a dispute.

Alex Watts :

The parties are free to agree the jurisdiction they want to govern the contract.

Alex Watts :

There is no hard or fast rule which says it must be UK or USA. So its a matter of negotiation between you and them

Customer:

Yes the actual statement is Governing Law. The rights and obligations of the parties under this Agreement shall be governed by and interpreted in accordance with the laws of the State of Minnesota. just wondering where i stand

Alex Watts :

It means if anything goes wrong you have to sue there

Alex Watts :

You can ask for UK but if they say no, they may say well you are not getting the contract/deal

Alex Watts :

Its therefore a commercial decision for you

Alex Watts :

But if it goes wrong you have to sue there, not the UK

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Yes what happens if they wish to sue does that mean its under US law and is there any way I can specify uk law

Alex Watts :

Yes currently under US law if you sign. You can ask for UK law but they may refuse

Alex Watts :

If they do then you have a choice, whether to enter into the contract under US law or not to sign the contract

Customer:

I assume thats down to the amount of risk I believe there is in fullfilling the contract

Customer:

The contract is to purchase US product and sell in the UK

Alex Watts :

Sadly yes.

Alex Watts :

Its a matter of risk and commercial decision for you. There is no legal answer.

Alex Watts :

You either can negotiate UK law or not. If not you chose whether to enter the contract

Alex Watts :

Does that clarify?

Customer:

oh ok, currently OI am a sole trader would being ltd give me better protection

Alex Watts :

Well it probably wont make much difference as if they sue in the USA they would find it hard and expensive to enforce it here

Customer:

Yes it does clarify thanks as you say is is a commercial risk I need to decide if I want to take it

Alex Watts :

Sure.

Alex Watts :

Can I clarify anything else for you?

Customer:

If I get UK law would ltd be better then

Alex Watts :

Yes that gives you an extra layer of protection

Customer:

ok thanks thats all for now

Alex Watts :

Great. If I could ask you to rate my answer before you go today, the button should be at the bottom of the screen

Alex Watts :

If you need more help please click reply

Customer:

ok will do

Alex Watts :

Thanks - have a good weekend

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