Governing law clause

A contract provision specifying which jurisdiction's laws apply to interpreting and enforcing the agreement, regardless of where either party is located.

Example

An agency based in New York and a client based in California both agree their contract will be governed by New York law, so any dispute is interpreted under New York's legal standards.

Why it matters for agencies

Standard boilerplate in most MSAs, and not scope-related directly, but it determines which state's contract-enforcement standards would apply if an unpaid change order or scope dispute ever escalated to a legal disagreement.