“This agreement shall be governed by and construed in accordance with the laws of India” – Explained
If you have ever been a party to a business contract or agreement, you must have come across a phrase similar to “This agreement shall be governed by and construed in accordance with the laws of India.” It might seem like legal jargon that does not hold much significance, but it is an integral part of any contract.
Let us break it down to understand what it means.
The phrase “governed by” refers to the laws of the country that would be applicable in case of any conflicts or disputes arising from the agreement. In this case, the laws of India would be the governing laws.
The phrase “construed in accordance with” refers to the interpretation of the terms and conditions of the agreement. It means that any ambiguities or confusion regarding the terms of the agreement would be resolved based on the laws of India.
Why is it necessary to include this phrase in the agreement?
When two parties enter into an agreement, they must ensure that they are aware of the legal implications of it. The inclusion of this phrase ensures that both parties are aware that in case of any disputes or conflicts, the laws of India would be applicable. It also helps in avoiding any jurisdictional issues that might arise due to differences in laws of different countries.
Moreover, including this phrase helps in establishing the credibility of the agreement. It gives the impression that both parties have carefully considered and agreed to the terms of the agreement while being aware of the legal implications.
In conclusion, the phrase “This agreement shall be governed by and construed in accordance with the laws of India” is not just a legal jargon but a crucial part of any contract. It ensures that both parties are aware of the laws that would be applicable in case of any conflicts and also helps in avoiding any jurisdictional issues. It is a sign of a well-drafted and carefully considered agreement.
