Does the contract language determine governing law?
No. The language, payment currency and place of signature do not replace an express governing-law clause. B2B parties may generally select the law governing their agreement, subject to overriding mandatory rules.
The choice affects interpretation, liability, limitation periods, contractual penalties and termination remedies. Accepting the counterparty's law merely because it appears in its template may increase advisory and dispute costs.
What happens if the parties make no choice?
The agreement is not invalid. The applicable law is identified under conflict-of-law rules. In the EU, Rome I provides rules based on the contract type and characteristic performance.
The result may be counterintuitive. Leaving the point unresolved usually postpones the issue until a dispute and makes foreign-law evidence necessary.
Why does governing law not select the court?
Governing law identifies the legal rules used to assess the contract. A jurisdiction clause identifies the court competent to hear disputes. Within the EU, Brussels I bis governs choice-of-court agreements and the recognition and enforcement of judgments.
How the issue appears in practice
Hypothetical example: a Polish customer and a foreign IT supplier
The supplier's template selects foreign law but no court and contains no measurable service levels or data-return obligation. After an outage, the parties first dispute jurisdiction and foreign-law requirements before addressing performance. Coordinated law and forum clauses, measurable SLA, escalation and a usable data-export obligation would have reduced that risk.
When is arbitration worth considering?
Arbitration may suit high-value, multi-jurisdictional or confidential matters and disputes requiring industry expertise. It is not automatically faster or less expensive.
The clause should identify the institution, seat, number of arbitrators and language. An incomplete clause may create a preliminary dispute before the merits are heard.
How should Polish and English versions be coordinated?
A bilingual agreement should state which version controls if the texts diverge. Both versions must nevertheless be accurate because they are used by the operational teams and may influence how obligations are understood.
Literal translation is especially risky for warranties, indemnities, contractual penalties and termination concepts that do not map neatly across legal systems.
When can the CISG apply?
The CISG may govern international sales of goods, including contract formation, seller and buyer duties and remedies for breach. Selecting the law of a Contracting State may lead to its application.
Parties wishing not to use the CISG should consider an express exclusion. Mixed contracts require an assessment of whether goods or services predominate.
Which operational clauses must support the choice?
Law and forum clauses do not replace payment, acceptance, liability, notice and exit mechanics. Goods contracts also require clear delivery terms and an accurately stated Incoterms rule. Service contracts need a measurable scope, customer dependencies and rights to deliverables.
Formal notices should be distinguished from day-to-day project emails so that the parties know who can amend, terminate or dispute the contract.
Legal basis
- Regulation (EC) No 593/2008 on the law applicable to contractual obligations (Rome I), in particular Articles 3–4
- Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, in particular Article 25
- United Nations Convention on Contracts for the International Sale of Goods, Vienna, 11 April 1980
- Polish Civil Code of 23 April 1964
This article provides general information and does not constitute legal advice for a specific matter. The appropriate solution depends on the facts, documents and business objective.
Summary
In a cross-border contract, governing law, jurisdiction, language and enforcement form one system even though each requires a separate decision. The boilerplate should reflect the actual transaction, the location of assets and the parties' operating model.