A choice of law clause or proper law clause is a term of a contract in which the parties specify that any dispute arising under the contract shall be determined in accordance with the law of a particular jurisdiction.
Explanation
As people and transactions now more frequently cross subnational, national and international borders both physically and electronically, it becomes necessary to consider which law will be applied in the event of dispute. Should the laws be the same, the question will be academic, but, if the laws are so different that the judgment (outcome of the case) would be different depending on which law the court applies, the choice of law becomes highly relevant.
References
Choice of law clause Wikipedia(Text) CC BY-SA