Contract Drafting
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Governing Law & Dispute Resolution
Defintions:
Governing Law refers to the legal jurisdiction whose laws will be used to interpret and enforce the terms of the contract. This means that if there is a dispute or legal issue related to the contract, the laws of the governing jurisdiction will apply.
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Dispute Resolution refers to the methods or procedures outlined in the contract for resolving disagreements or conflicts that may arise between the parties. These methods can include negotiation, mediation, arbitration, or litigation. The chosen dispute resolution mechanism is designed to provide a structured way to settle disputes outside of court or through the legal system. The purpose is to offer a more efficient and cost-effective way to resolve conflicts between parties while avoiding lengthy court processes. The specific method chosen is typically outlined in the contract and agreed upon by the parties involved.
Example 1:
Governing Law: This Agreement is governed by the laws of the United States.
Dispute Resolution: Any disputes shall be settled through arbitration in accordance with the rules of the American Arbitration Association.
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Example 2:
Governing Law: This Agreement is governed by the laws of the State of Texas.
Dispute Resolution: Any disputes shall be resolved through mediation, and if mediation is unsuccessful, by binding arbitration under the laws of the State of Texas.
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