Europe & UK: Which governing law to choose for your contract?
December 12, 2025
Europe & UK: Which governing law to choose for your contract?December 12, 2025 Understanding the fundamentals of German, English & Welsh, Dutch, Italian, French, Spanish and Austrian laws Why should I read this?When parties to a contract are based in different jurisdictions, choosing the right governing law is critical. The decision affects enforceability, risk exposure and operational flexibility. While there is no universal answer, some jurisdictions offer clearer frameworks and greater predictability than others. When choosing the governing law, you should take into account certain restrictions which may apply. For example, it is not always possible to opt out of the application of mandatory local law provisions. While the circumstances of the individual case always need to be taken into account, there are some general Pros and Cons regarding individual jurisdictions’ governing laws. Guide to contractual lawsAustria: Balanced and predictable, but mandatory rules and unlimited liability can restrict flexibility. England & Wales: Globally recognised and flexible, yet costly litigation and strict rules on unfair terms pose risks. France: Structured and stable, but mandatory rules and language requirements limit contractual freedom. Germany: Predictable and codified, though strict T&C rules and unlimited liability increase complexity. Italy: Structured and EU-aligned, but mandatory provisions and T&Cs formalities require strict compliance. Netherlands: Flexible and EU-aligned, yet fairness principle and termination rules may undermine predictability. Spain: Flexible and autonomy-driven, but mandatory rules and enforcement hurdles can complicate cross-border deals.
How should I determine which governing law to choose?The governing law determines how disputes are resolved, which mandatory rules apply, and whether contractual terms will stand. Missteps can lead to unenforceable clauses, unexpected liabilities, and costly litigation. Strategic considerations:
Operational priorities:
Next steps: Audit existing contracts for governing law clauses and identify exposure to mandatory rules in key jurisdictions. Where new agreements are planned, involve legal teams early to avoid enforceability risks. Co-authored by Clare Johnston (Knowledge) Key contacts
Kelly Holmes Partner United Kingdom Beatrice Bigonzi Partner Milan, Italy Michael Röhsner Partner Vienna, Austria Dr. Kathrin King Principal Associate Munich, Germany Judith Ledeboer-Vieberink Principal Associate Rotterdam, Netherlands Julie Poivey Senior Associate Paris, France Clare Johnston Business Professional United Kingdom Latest Insights
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