Applicable Law

Applicable Law is a core legal clause in foreign trade contracts, referring to the specific national or regional law agreed upon by both parties to interpret the contract, determine liability for breach, and resolve disputes in the event of a dispute. Its use scenarios include various foreign-related contracts such as international sale of goods, agency, distribution, and technology licensing. Precautions: First, the chosen law should have a practical connection with the contract (such as the seller's place of business or the place of contract performance), otherwise it may be rejected by a court or arbitration institution; second, avoid choosing the law of a country with which you are unfamiliar or whose legal system is incomplete; third, if choosing the United Nations Convention on Contracts for the International Sale of Goods (CISG), it must be explicitly excluded or applied. Unlike 'Jurisdiction,' which determines 'in which country the case is heard,' Applicable Law determines 'which country's law is used to judge'; the two can be agreed upon separately. It is also not equivalent to an 'arbitration clause,' which stipulates the dispute resolution method, while the applicable law can still be chosen independently.