I have a question about what the difference is between applicable law and governing law. Are they the same (one) concept or different?

In addition, what is choice of law? Does it mean the plaintiff or defendant can choose the governing law or applicable law?

I am not a law student. Could you give me a brief explanation or some examples about it?

Thank you.

1 Answer 1


Choice of law (also called conflict of laws) arises when a legal dispute occurs across legal boundaries. For example, suppose I live in New York, and sign a contract to buy computers from you, a company headquartered in California. If we have a dispute about the contract, we need to decide which state's law and which courts (and juries) will be used to resolve the dispute. The law that applies to our dispute is called the applicable or governing law.

In many cases, it doesn’t matter which law or court we use. But in some cases, it matters a lot. For example, the California law may be friendlier to customers, or a jury in New York may be friendlier to me than to a California companies.

Since we know that the choice of law and court may matter, we may specify in the contract which laws and courts will be used to resolve any disputes. (These may not be the same. The contract could say that our case will be heard in the SDNY using CA law.) The clause that says which laws apply, and which courts will apply them, is called a governing or applicable law clause.

Here’s an example many of us have used, probably without realizing it:

APPLICABLE LAW By using any Amazon Service, you agree that the Federal Arbitration Act, applicable federal law, and the laws of the state of Washington, without regard to principles of conflict of laws, will govern these Conditions of Use and any dispute of any sort that might arise between you and Amazon.

  • Thank you, Just a guy, very helpful. I’d like to confirm: 1) Do you mean the applicable law and the governing law are the same one concept? 2) The parties can agree in the contract where to resolve a dispute (i.e. that state's laws will apply to the dispute), but they usually don't specify which specific law will apply which will be left to the jury to decide. For example, in a trial the California jury thinks the California Sale of Goods Act applies to the case, then my question is: In legal terms, that "Act" is called applicable law or governing law? Thank you.
    – edgar
    Jul 10, 2020 at 22:18
  • @edgar You are welcome! (1): Generally, people use them to mean the same thing. I say "generally" because some people distinguish the two. I think you can safely ignore those people. As a practical matter, I'd say that if it works for Amazon to treat them the same, it will work for the rest of us. (Here's a thoughtful argument from the other side: knowledgetonegotiate.blogspot.com/2013/11/…)
    – Just a guy
    Jul 10, 2020 at 23:05
  • Three points on (2) First, I edited the answer to make it clear that the trial site and law need not be the same. You could agree the case will be heard in a NY court but using CA law. Second, you are right; they leave it to the lawyers in the specific case to argue about which specific statute applies. Third, in the US, judges decide which law applies and juries decide what the facts are. Since the facts may determine what law applies (homicide v. manslaughter), juries only indirectly decide which law applies.
    – Just a guy
    Jul 10, 2020 at 23:44

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