Physician Contract Governing Law Clause

Physician Contract Governing Law Clause

Physician Contract Governing Law Clause

In the intricate landscape of physician employment contracts, the ‘Governing Law Clause’ plays a pivotal role. This provision specifies which state’s laws will be used to interpret and enforce the contract. Given the diversity in state laws, especially around medical practices, this clause is crucial for providing clarity and predictability in legal matters related to the contract.

Why It Matters in Physician Contracts

Navigating Varied State Laws

The United States boasts a varied legal landscape, with each state having its unique set of laws and regulations, particularly in healthcare. The Governing Law Clause ensures that the physician and the employer are on the same page regarding which state’s laws will apply, thus avoiding legal ambiguity.

Importance in Dispute Resolution

Disputes are not uncommon in employment relationships, and this is true for physician contracts as well. The Governing Law Clause provides a predefined legal framework for resolving such disputes, which can save time, money, and confusion when legal issues arise.

Example Scenario

Consider a physician working for a healthcare system that operates in multiple states. If a dispute arises, the Governing Law Clause will determine whether the physician’s home state law, the employer’s state law, or another state’s law applies. Without this clause, there could be lengthy legal debates about which state’s laws to use, complicating the resolution process.

Drafting the Governing Law Clause

Precision and Clarity

When drafting a Governing Law Clause in a physician contract, precision and clarity are key. The clause should unambiguously state the chosen state law, ensuring no room for interpretation that might lead to future disputes.

Considering the Physician’s and Employer’s Interests

Both parties should carefully consider and negotiate the Governing Law Clause. It’s crucial to balance the interests of the physician and the employer. For instance, a physician might prefer the laws of the state where they are licensed and practice, while the employer might lean towards the laws of the state where their headquarters are located.

Legal Expertise is Essential

Given the complexities and potential consequences of the Governing Law Clause, consulting with healthcare law professionals is highly recommended. This ensures that the contract is fair, compliant with relevant laws, and protects the interests of both parties.


The Governing Law Clause is more than a standard legal formality in physician contracts; it ensures legal clarity and security. It establishes a clear legal foundation upon which other aspects of the contract are built and enforced. For physicians and healthcare organizations, understanding and carefully negotiating this clause is critical for a successful and legally sound employment relationship.

Below is an example of a Physician Contract Governing Law Clause that could be used in a physician employment contract.


Governing Law. This Agreement will be construed in accord with and any dispute or controversy arising from any breach or asserted breach of this Agreement will be governed by the laws of the State of Arizona.


Download the Physician Contract Governing Law Clause


This sample provision is offered “as is,” without any express or implied warranty of any kind, including warranties of merchantability, legal effect, accuracy, appropriateness, completeness, non-infringement, or fitness for a particular purpose. This sample provision should be used only as a general guide for legal drafting and should be modified to meet all the applicable laws and regulations in your city, state, and county, as applicable. You understand that you are using any and all information, forms, sample provisions, and other resources from Chelle Law, PLC at your own risk.

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