Can two Tunisian companies choose French law for their contract?

Parties generally have wide freedom in international contracts, but a purely domestic contract remains subject to Tunisian mandatory rules. Check with a lawyer whether the contract has a sufficient foreign element.

What is the difference between governing law and jurisdiction?

Governing law designates the legal rules that apply to the contract. A jurisdiction or arbitration clause designates who will decide the dispute. A Tunisian court can apply French law, and vice versa.

What happens if a contract has no governing law clause?

The court seised determines the law under its own conflict rules, often by reference to the country of the party providing the characteristic performance. The outcome is less predictable and the debate adds cost.

Clause templatesDisputes

Governing law clause

A governing law clause designates the law that governs the contract: its validity, its interpretation and the consequences of a breach. In a contract between parties from different countries, it avoids a costly debate about which law applies before the merits are even reached. It works together with a jurisdiction or arbitration clause.

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Clause template

1. This agreement, and any matter relating to its formation, validity, interpretation, performance and termination, is governed by the law of [COUNTRY], excluding its conflict-of-laws rules. 2. [OPTION: The United Nations Convention on Contracts for the International Sale of Goods is expressly excluded.] 3. The choice of this law does not deprive either party of the protection of applicable mandatory rules, in particular on employment, consumer protection or data protection. 4. Any dispute relating to this agreement shall be submitted to [THE EXCLUSIVE JURISDICTION OF THE COURTS OF CITY / ARBITRATION UNDER THE RULES OF INSTITUTION, SEATED IN CITY, IN LANGUAGE], after an attempt at amicable settlement lasting [NUMBER] days. 5. This agreement is drawn up in [LANGUAGE(S)]; in case of discrepancy, the [LANGUAGE] version prevails.

Replace the bracketed items before use.

Variants

Neutral law and arbitration version

This agreement is governed by the law of [NEUTRAL COUNTRY], chosen jointly for its predictability. Any dispute shall be finally resolved by arbitration under the rules of [INSTITUTION], by [ONE / THREE] arbitrator(s), seated in [CITY], in [LANGUAGE]. The parties may seek urgent interim measures from the competent court.

When to use it

You contract with a client, supplier or freelancer based in another country.
You and your client are in the same country but the work is performed elsewhere.
You enter a partnership between companies in the MENA region or with a European partner.
You use a foreign contract template and want to clarify the applicable law.

Mistakes to avoid

Choosing a law without choosing a court or arbitration, or the reverse, which creates costly combinations.
Choosing a law that nobody in the business or among its advisers knows.
Assuming the chosen law displaces local mandatory rules (employment, consumer, data).
Forgetting a language clause in a bilingual or trilingual contract.

Contracts that use this clause

Frequently asked questions

Parties generally have wide freedom in international contracts, but a purely domestic contract remains subject to Tunisian mandatory rules. Check with a lawyer whether the contract has a sufficient foreign element.

Other Disputes clauses

Sources

HCCH, Principles on Choice of Law in International Commercial Contracts

Indicative template, to adapt to your situation. It does not replace legal advice.

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Governing law clause

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Variants

Neutral law and arbitration version

When to use it

You contract with a client, supplier or freelancer based in another country.

You and your client are in the same country but the work is performed elsewhere.

You enter a partnership between companies in the MENA region or with a European partner.

You use a foreign contract template and want to clarify the applicable law.

Mistakes to avoid

Choosing a law without choosing a court or arbitration, or the reverse, which creates costly combinations.

Choosing a law that nobody in the business or among its advisers knows.

Assuming the chosen law displaces local mandatory rules (employment, consumer, data).

Forgetting a language clause in a bilingual or trilingual contract.