Without a governing law clause naming a specific jurisdiction, any user in any country can sue you in their local courts under local law — including jurisdictions with no liability caps, mandatory consumer protections that override your terms, or plaintiff-friendly class action rules. Vague clauses like "applicable laws" or "laws of the country where we operate" have been repeatedly struck down by courts as unenforceable, leaving the governing law question open to the opposing party's choice. UCC §1-301 and international private law principles both require specificity to select governing law. A single missing or placeholder jurisdiction ([STATE]) invalidates the clause entirely.
High because a missing or vague jurisdiction clause leaves the business exposed to litigation in any forum worldwide, with no ability to predict or limit legal costs or applicable consumer protection law.
Add a governing law section near the end of your Terms of Service, naming a specific state or country. Choose the jurisdiction where your company is incorporated or headquartered — consult a lawyer for the most strategically favorable choice.
## Governing Law
These Terms are governed by and construed in accordance with the laws of the
State of Delaware, without regard to its conflict of law principles.
## Dispute Resolution
Any dispute arising from or relating to these Terms or your use of the Service
will be resolved in the state or federal courts located in New Castle County,
Delaware. You consent to the exclusive jurisdiction of those courts.
If you named a specific state in your incorporation documents, use the same state here. Search your Terms file for [STATE], [JURISDICTION], or [COUNTRY] — any remaining placeholder invalidates the clause.
ID: legal-pages-compliance.content-clarity.jurisdiction-stated
Severity: high
What to look for: Enumerate every relevant item. Find the governing law clause in the Terms of Service. It is typically near the end of the document under headings like "Governing Law," "Choice of Law," "Jurisdiction," or "Dispute Resolution." The clause should name a specific jurisdiction — a US state (e.g., "These Terms are governed by the laws of the State of Delaware"), a country (e.g., "the laws of England and Wales"), or similar. Also look for a venue clause specifying which courts have jurisdiction (e.g., "You consent to the exclusive jurisdiction of the courts of Santa Clara County, California"). Check whether the clause is present and specific — vague statements like "applicable laws" or "laws of the country where we operate" without naming a specific jurisdiction do not pass.
Pass criteria: At least 1 of the following conditions is met. The Terms of Service includes a governing law clause naming a specific jurisdiction (state, province, or country). A venue clause or arbitration clause specifying where disputes are heard is also present. Both clauses are clear and specific.
Fail criteria: No governing law clause exists. Governing law clause exists but does not name a specific jurisdiction. Clause present but contradictory (e.g., names two conflicting jurisdictions without a priority rule).
Skip (N/A) when: No Terms of Service exists (flagged by tos-exists check above).
Detail on fail: Specify what is missing or vague. Example: "Terms of Service has no governing law clause." or "Governing law section states 'applicable laws' without naming a jurisdiction." or "Jurisdiction clause found but references '[STATE]' — placeholder was never replaced with actual state name.".
Remediation: Add a governing law section near the end of your Terms of Service. Choose a jurisdiction that makes sense for your business — typically where your company is incorporated or headquartered. Consult a lawyer to determine the most favorable jurisdiction for your use case.
Example governing law clause (for US company in Delaware):
## Governing Law
These Terms are governed by and construed in accordance with the laws of the State of
Delaware, without regard to its conflict of law principles.
## Dispute Resolution
Any dispute arising from or relating to these Terms or your use of the Service will
be resolved in the state or federal courts located in [County], Delaware. You consent
to the exclusive jurisdiction of those courts. If you are a consumer in a jurisdiction
that does not permit mandatory jurisdiction clauses, this section does not apply to you.
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Example for UK company:
## Governing Law
These Terms are governed by the laws of England and Wales. Any dispute will be
subject to the exclusive jurisdiction of the courts of England and Wales.