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PLAYBOOK TEMPLATES

Operating Agreement

An Operating Agreement governs internal management and ownership rights of a limited liability company. This playbook highlights voting procedures, capital contributions, and dissolution mechanics.

Governing Law & Disputes

Why This Matters: Inappropriate dispute mechanisms can increase costs, delay resolutions, and impact enforceability across jurisdictions.

Negotiation strategy

If you're the Company:

Ensure the governing law is favorable to your business operations and aligns with your risk management strategy. Opt for arbitration to avoid lengthy court proceedings.

If you're the Members:

Negotiate for a neutral jurisdiction that does not disproportionately favor the other party. Consider mediation as a first step to resolve disputes amicably.

Essential elements

1

Governing Law

Specifies applicable legal regime.
2

Jurisdiction

Determines court location for disputes.
3

Dispute Resolution

Outlines arbitration or mediation process.

Action framework

ACCEPT

Propose edits if the jurisdiction is unfavorable or if the dispute resolution process lacks clarity.

EDIT

Reject clauses that impose excessive burdens or risks, such as unfavorable governing law.

ADD

Add clauses if missing to ensure clarity and risk mitigation in legal proceedings.

PRO TIP

Always specify a reputable arbitration institution and clear procedural rules to avoid ambiguity.

Example clauses

FAVORABLE

Preferred New York Governing Law

"This Agreement shall be governed by and construed in accordance with the laws of New York."
NEUTRAL

Template Governing Law Clause

"This Agreement shall be governed by and construed in accordance with the laws of [State/Country]."
UNFAVORABLE

Unclear Jurisdiction Clause

"The jurisdiction for any disputes shall be determined at a later date."

Fallbacks

Cross-Border Transactions

In cross-border deals, ensure the governing law is internationally recognized and the dispute resolution process is enforceable in multiple jurisdictions.

High-Value Contracts

For high-value contracts, prioritize arbitration to maintain confidentiality and control over the dispute resolution process.

Long-Term Agreements

In long-term agreements, consider periodic reviews of the governing law and dispute resolution clauses to adapt to changing legal landscapes.
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