Can Terms & Conditions Be Global? How Governing Law Clauses Work

Last updated: 13 June 2025

More and more online businesses are marketing to overseas customers. An online business gives you access to a larger potential customer base, which is an easy and low-cost way to sell more goods and services.

So what do businesses do about Terms and Conditions (“T&Cs”) for their customers in other countries? Can they still be sued if things go wrong? And what can you do to protect yourself when selling your products and services overseas?

It is difficult to provide an all-encompassing answer to the question or even one that business owners want to hear. But here goes.

Local laws govern Ecommerce

There is no comprehensive, general set of Terms and Conditions for international electronic commerce, online businesses or global transactions.

Generally, if you sell to customers located in another state or country, your ecommerce business is subject to the laws and regulations of those other jurisdictions. Your customers may be able to sue your business in their local court or even close your business down if your business is declared to breach or not comply with their local laws.

The best protection for your business would be to consult lawyers in each country where you sell your goods and services. Then, have them draft your Terms to comply with their local requirements on consumer law, payments, taxes and other regulations.

Then, on your website, have a ‘country selection’ drop-down menu or visible flag showing which version of your website is being used. The Terms and Conditions would then match the applicable laws of that jurisdiction.

However, this can become extremely expensive, especially since each of the US states has its own laws.

Include a Governing Law clause in your T&Cs

Alternatively, strong Terms and Conditions written by Australian lawyers that clearly outline your Terms, such as refunds, guarantees, delivery and other information for doing business, go a long way to protect business owners. They can help avoid confusion when purchasing and potential disputes with customers. However, they are not guaranteed against customer claims, even in Australia.

Many website T&Cs contain a Governing Law clause that indicates where the business is located and the law under which the Terms of the business are governed. In your Governing Law clause, you nominate the State where your business is registered. It does not mean you can only conduct business in that State. But it does mean that your business and Terms are governed by the legislation in the State you nominated.

So when customers agree to purchase your goods and services, they agree to your Terms with your Governing Law clause. This means that any dispute or claim they have with your goods or services will be made in your nominated State.

It also means that the laws of that State govern the Terms of your agreement with the customer. This can save you the time and money of travelling to defend a claim from a customer in another jurisdiction.

And get “active” agreement

Governing Law clauses are being upheld by many countries and in many Internet cases. But to get extra protection, have your customers “actively” agree to your Terms. You can get them to tick a box or otherwise indicate positive consent.

This is more readily enforceable and provides more protection than T&Cs posted on the website, which customers can read at any time.

But be aware: while a Governing Law clause may be accepted in many countries, some countries may argue that it is void on the grounds of public policy or not in the best interests of their local consumers. Generally, this has largely depended on the case, the gravity of the issue, the goods and services being sold and the country’s regulations themselves.

Remember, before selling products and services in any country, you should always familiarize yourself with local consumer laws relating to your business. You don’t want to trigger certification or licensing requirements. And if in doubt, check with other business owners or local regulators – they often are happy to discuss!

About the Author: Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with 20+ years experience in corporate, banking and trust law. Click for full bio of Vanessa Emilio or follow on LinkedIn.

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