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  • #987933
    • Total posts: 9

    While dealing with a foreign client in the US, how is the contractor agreement governed? Can I write something like below?

    This agreement shall be governed by the laws of New South Wales, Australia. Any legal action arising out of its use shall be brought and enforced under the laws of New South Wales, Australia……

    How are disputes resolved if I have to go to court? Can I take legal action against a foreign client from Australia?

    • Total posts: 500


    Caveat – I am not a lawyer…

    But, that fact aside, I expect you can add the clause you want concerning which jurisdiction is used, as it is in every software licence agreement that we ever see! However, I do not know how you would go about actually settling a dispute in court.

    Good luck!


    Carl Desacola
    • Total posts: 21

    Hi Ricdel,

    The general rule in Australia is that a court will allow you to commence legal action against a foreign party unless the court is shown to be a “clearly inappropriate forum”. That is, it must not be vexatious or oppressive to hear the case in the domestic court.

    In practice, this means that Australian businesses will generally be able to commence legal action against a foreign client in the domestic courts. The real challenge, however, lies in enforcing the judgment against the foreign client even if you were to in your case – the legal costs involved are usually quite astronomical.

    It is for this reason that the parties generally resort to one of three things, depending on the amount of money involved and how complicated the dispute is:

    1. Walk away and bear their own losses (this is the most common solution particularly for small businesses);
    2. Negotiate a settlement (both parties compromise); or
    3. Have the dispute formally arbitrated by a third party (in large disputes).

    As for your suggested governance clause, I would suggest using the following:

    This deed is governed by the laws of New South Wales, Australia. Each party irrevocably submits to the non-exclusive jurisdiction of the courts of that State.

    I hope this has been helpful.

    Kind Regards,

    Carl Desacola, Lawyer & Registered Migration Agent (MARN 1461661)
    Winthrop Mason | Business Lawyers & Migration Agents

    • Total posts: 556

    sounds like a whole lot of headaches!

    try and minimise the chances of ever having disputes in the 1st place…
    for me, client vetting, clear communication, clear project scopes, project milestones, deposits etc all help minimise risks of things going wrong

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