Cross-border agreements and the choice of governing law

In order to meet the demands of a constantly evolving global marketplace, companies often seek to expand their operations through cross-border mergers and acquisitions. When pursuing an international transaction, the parties must consider a unique aspect of the deal – the legal framework in which the deal and any contractual agreements within it are to be governed. Governing law provisions Canadian law generally espouses the principles of contractual autonomy and international comity (being respect for a foreign court’s jurisdiction and laws). As a result, when multiple jurisdictions are involved in an M&A transaction, the contracting parties have an opportunity to identify the law by which an agreement should be interpreted. This can be achieved by incorporating a “governing law” or “choice of law” provision into an agreement. For example, a choice of law provision may be drafted to establish Ontario as the preferred jurisdiction of law…

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