Governing Law Clause Emails

Dear [Name], We have reviewed the NDA and would like to discuss the governing law provision in Section [X], which currently specifies [State] law. Our company is headquartered in [Your State] and the vast majority of our operations, employees, and legal infrastructure are located there. Agreeing to [Their State] law would require us to: - Engage outside counsel familiar with [Their State] law for any dispute - Accept uncertainty regarding how [Their State] courts would interpret key provisions - Potentially face substantive differences in trade secret and contract law We propose amending the governing law provision to specify [Your State] law. As the receiving party, we bear the primary compliance burden under this NDA, and applying our home state's law allows us to more effectively ensure compliance and assess our obligations. Alternatively, if neither party's home state is acceptable, we would consider a neutral jurisdiction such as Delaware or New York, both of which have well-developed bodies of commercial law and are frequently used in multi-party commercial agreements. We look forward to discussing this with you. Best regards, [Your Name]

Dear [Name], Following our discussion about the governing law provision, I would like to propose a neutral solution that should work for both parties. Since we are headquartered in [Your State] and you are in [Their State], neither party has a natural advantage if we choose a neutral jurisdiction. We propose Delaware law for the following reasons: 1. Predictability: Delaware has the most developed body of commercial and contract law in the United States 2. Expertise: Delaware courts (particularly the Court of Chancery) have extensive experience with business disputes 3. Neutrality: Neither party is located there, ensuring a level playing field 4. Precedent: Delaware is the most commonly selected neutral jurisdiction in commercial agreements Alternatively, New York law would also be acceptable. New York similarly has sophisticated commercial law and is commonly used in national and international transactions. We propose the following language: "This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles." The "without regard to conflict of laws" language ensures that Delaware substantive law actually applies rather than Delaware choice-of-law rules potentially pointing to another jurisdiction. Please let me know if this approach works for you. Best regards, [Your Name]

Dear [Name], Thank you for your comments on the governing law provision. I understand your preference for [Their Proposed State], but we have substantive reasons for specifying [Your State] law that go beyond mere convenience. [Your State] has particularly robust trade secret protections, including: - [Specific advantage, e.g., "broader definition of trade secrets under our state's version of the UTSA"] - [Specific advantage, e.g., "stronger remedies provisions including criminal penalties for willful misappropriation"] - [Specific advantage, e.g., "favorable case law interpreting reasonable efforts requirements"] Since we are the party primarily sharing sensitive confidential information under this NDA, the strength of trade secret protections is directly relevant to our risk assessment. Choosing a jurisdiction with weaker protections would require us to reconsider the scope of information we can comfortably share. That said, we recognize your legitimate interest in predictability. We propose the following compromise: We will maintain [Your State] law as the governing law, but we will agree to [Their State] as the venue for any litigation. This gives us the substantive protections we need while allowing you home court advantage for any disputes. Alternatively, we would consider California law, which has strong trade secret protections under CUTSA and the Defend Trade Secrets Act, and is frequently used in technology-related NDAs regardless of where parties are located. I am happy to discuss further. Best regards, [Your Name]

Dear [Name], Since this is a mutual NDA where both parties will be disclosing confidential information, I would like to propose a governing law structure that reflects this mutuality. Rather than choosing one party's law to govern all disclosures, we could use a split governing law provision where each party's disclosures are governed by their own home state law: "With respect to Confidential Information disclosed by [Party A], this Agreement shall be governed by the laws of [Party A's State]. With respect to Confidential Information disclosed by [Party B], this Agreement shall be governed by the laws of [Party B's State]. For provisions not specifically related to either party's Confidential Information, the laws of [Neutral State or Party A's State] shall govern." This approach: - Allows each disclosing party to rely on the trade secret laws they know and understand - Eliminates any perceived advantage from the choice of law selection - Reflects the balanced nature of a mutual confidentiality relationship We recognize this adds some complexity, but in our experience it often resolves governing law disputes more effectively than extended negotiation over a single choice. Would you be open to this structure? Best regards, [Your Name]

Dear [Name], Thank you for sending the draft NDA. We note that Section [X] specifies [Foreign Country] law as the governing law. We would like to propose an alternative. While we respect [Foreign Country]'s legal system, applying U.S. law would be more practical for the following reasons: 1. Familiarity: Our legal team is equipped to advise on U.S. law without engaging foreign counsel 2. Federal Protection: The U.S. Defend Trade Secrets Act provides uniform federal protection that applies regardless of which U.S. state law governs 3. Enforcement: U.S. judgments are more easily enforced in U.S. courts where both parties likely have assets and operations 4. Precedent: There is extensive U.S. case law interpreting NDA provisions, providing predictability for both parties We propose New York or Delaware law, both of which are commonly used in international commercial agreements precisely because of their neutrality and developed body of commercial law. Many international parties find these jurisdictions acceptable regardless of where they are headquartered. We are flexible on which U.S. state, but we do need the agreement to be governed by U.S. law to proceed. If [Foreign Country] law is a firm requirement, we would need to engage local counsel to review the implications, which would significantly delay execution. Can we agree on U.S. law as a starting point? Best regards, [Your Name]

Dear [Name], I have a technical comment on the governing law provision in Section [X]. The current draft states: "This Agreement shall be governed by the laws of [State]." This language does not address conflict of laws principles. Under [State]'s choice-of-law rules, a court might determine that another jurisdiction's law should actually apply based on factors like where the parties are located, where performance occurs, or where the confidential information is used. To ensure predictability, we recommend adding the standard "without regard to conflict of laws" language: "This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles that would require application of the laws of another jurisdiction." This ensures that: - [State] substantive law actually governs the agreement - Courts cannot apply [State]'s conflicts rules to choose a different law - Both parties have certainty about which law applies This is standard drafting practice and should not be controversial. Please confirm you can incorporate this change. Best regards, [Your Name]

Dear [Name], Thank you for your proposal to use California law as the governing law for the NDA. Before we agree, I want to raise some concerns and ensure we are aligned on the implications. While California has strong trade secret laws under CUTSA, it also has unique policies that could affect enforcement: 1. Non-Compete Restrictions: California Business and Professions Code Section 16600 voids non-compete agreements. If any provisions of our NDA could be construed as restricting employee mobility (e.g., broad definitions of confidential information that effectively prevent working for competitors), California courts may not enforce them. 2. Employee Rights: California courts tend to construe confidentiality agreements narrowly when they affect employee mobility, potentially limiting protection for general skills and knowledge. 3. Public Policy: California has strong public policies favoring competition and employee freedom that could affect how restrictive provisions are interpreted. We are not opposed to California law, but we want to ensure our expectations are aligned. Specifically: - Do you anticipate hiring any of our employees or consultants? - Are there specific California law advantages you are seeking? - Would you consider a state with more balanced treatment of these issues, such as Delaware? If we do proceed with California law, we may need to adjust certain provisions to ensure enforceability under California standards. Let me know your thoughts. Best regards, [Your Name]

Dear [Name], After further internal discussion regarding the governing law provision, we have a compromise proposal. We recognize that you have a strong preference for [Their State] law, and we understand the rationale given your headquarters location and legal infrastructure. We are prepared to accept [Their State] as the governing law, provided we can reach agreement on venue. Our proposal: 1. Governing Law: [Their State] law shall govern the agreement (as you proposed) 2. Venue: Any litigation arising from this agreement shall be brought exclusively in the state or federal courts located in [Your City/State] This compromise gives you the substantive law you prefer while giving us the practical advantage of litigating in our home courts. From our perspective, having local venue is more important than the choice of law because: - Travel and logistics for our witnesses and legal team are simplified - We have established relationships with local counsel - We avoid the burden of managing out-of-state litigation This is a common approach in commercial agreements where parties are in different locations. The governing law and venue do not need to match, and separating them often provides a path to agreement. Would this work for you? Best regards, [Your Name]