Where US state law changes the contract.
Four points decide most US contracts, and each is why we draft to the governing state rather than to a national template. For the general rules of enforceability, see our guide to drafting a contract in the USA that holds up in court.
Non-competes: banned in some states, enforced in others
California voids nearly all post-employment non-competes by statute, and Minnesota and North Dakota restrict them too. Florida and Texas enforce them if reasonable in time, geography and scope. The FTC’s 2024 nationwide non-compete rule was set aside by a federal court before it took effect, so state law decides. Details in our non-compete rules by state.
Delaware for corporate and investor documents
Delaware’s Court of Chancery and settled corporate case law make it the usual governing law for shareholders’ agreements, SAFEs and investor documents, even when the company operates elsewhere. Investors expect to see it.
Goods versus services
Sales of goods fall under the Uniform Commercial Code, adopted with state-by-state variations. Services fall under state common law. SaaS and hardware-plus-software deals need the predominant-purpose question handled correctly, or the wrong body of law applies.
Employees versus contractors
Worker-classification rules, especially California’s ABC test, decide whether a 1099 contractor is legally an employee, so the agreement and the working relationship both have to line up. See the 1099 contract guide.
The governing-law clause is not boilerplate. In the US it is often the single most important line in the contract.