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GOVERNING LAW
In Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford Junior University, 489 U.S. 468 (1989), the U.S. Supreme Court held that the Federal Arbitration Act ("FAA") did not preempt the California Arbitration Act in an interstate dispute where the parties agreed that their contract would be governed by California law. Thus, if the parties wish to ensure that the FAA will apply, regardless of the law that they have specified to govern on substantive issues, the arbitration clause should so provide as follows:

1. This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of {State.the}, exclusive of conflict or choice of law rules.
2. The parties acknowledge that this Agreement evidences a transaction involving interstate commerce. Notwithstanding the provision in the preceding paragraph with respect to applicable substantive law, any arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal Arbitration Act (9 U.S.C., Secs. 1-16).