Is A Governing Law Clause Enforceable in Australia?
Australian courts generally respect the parties' express choice of governing law under ordinary common-law conflict-of-laws principles, including a choice of a foreign law for a contract with no other connection to that jurisdiction. Mandatory Australian Consumer Law protections can still apply regardless of the chosen law in defined consumer circumstances.
This page describes the general approach Australia law takes to this clause type — it is informational, not legal advice on any specific contract. Enforceability in a real dispute depends on the exact wording, the specific facts, and current law, all of which can change. Have your actual clause reviewed by a lawyer before relying on it.
How Australia approaches this
As a matter of common-law conflict-of-laws doctrine, Australian courts give effect to the parties' express choice of governing law for a commercial contract, applying it as the proper law of the contract without requiring any connection between the chosen law and the underlying transaction.
This deference is not unlimited — certain Australian Consumer Law protections apply on a mandatory basis to protect Australian consumers regardless of a foreign choice-of-law clause, similar in concept to the mandatory-rules carve-outs found in EU and UK law, though implemented through different statutory mechanisms.
For a straightforward B2B commercial contract with no consumer element, Australian courts generally give full effect to the chosen governing law, whether that is Australian law or a foreign system.
What determines the outcome
- Whether the contract has a consumer element that could trigger mandatory Australian Consumer Law protections regardless of the choice
- Whether the chosen governing law is genuinely and clearly expressed in the contract
- Consistency between the governing law choice and the dispute-resolution clause
Practical guidance
- For B2B contracts, rely on Australian courts' general deference to an express choice of governing law
- For any consumer element, check whether Australian Consumer Law mandatory protections could still apply despite the choice
- Pair the governing law clause deliberately with the dispute-resolution mechanism
Frequently asked questions
Is a governing law clause enforceable in Australia?
Australian courts generally respect the parties' express choice of governing law under ordinary common-law conflict-of-laws principles, including a choice of a foreign law for a contract with no other connection to that jurisdiction. Mandatory Australian Consumer Law protections can still apply regardless of the chosen law in defined consumer circumstances.
Is this legal advice?
No. This page describes the general approach Australia law takes to governing law clauses — it is not legal advice on any specific contract. Enforceability in a real dispute depends on the specific wording, facts, and current law. Have the actual clause reviewed by a lawyer before relying on it.
Governing Law Clause in other jurisdictions
Other clauses in Australia
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