What does it do?
A governing law clause is where parties will decide which law will apply to their relationship. It is not unusual for contracts to be between parties from different countries. You will usually insert a clause which chooses which countries laws will apply.
This is different from the Jurisdiction Clause which decides which court and in which country the case will be heard.
Our Kleva Contracts are drafted in line with South African law but you can decide that the law of a different country will apply. Bear in mind that this might change the legal effect of the contract and should only be considered with expert advice as to the effect.
Real life example:
You are importing goods from Germany. You know that the EU legislation on product liability favours the purchaser more than South African laws. You can choose that the laws of the EU govern the agreement between you, even if you sue out of South Africa.
Kleva contract sample wording:
The Laws of the Republic of South Africa shall govern this agreement