I live in Virginia. My LLC search vehicle is incorporated in Delaware. The acquisition target is in Massachusetts. Which state governs the letter of intent and transaction documents?
My guess is that the docs should be "governed by and construed in accordance with internal laws of the state of Massachusetts, without giving effect to any choice or conflict of law provision or rule (whether of the state of Massachusetts or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the state of Massachusetts."
But then why did I incorporate in Delaware?
Which legal jurisdiction?
by a searcher from Carleton College
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The governing law of transaction documents is which law will be determined to interpret the terms of those agreements and any outcomes related to them - certain states (like Delaware) are more business friendly, certain states are more consumer friendly, certain states have more case law to interpret terms (generally Delaware), etc. The venue where any disputes may be resolved is generally where it is convenient for the party with more bargaining power, and generally should be cohesive with the governing law provision. I.e. you don't want Massachusetts courts apply Delaware law. They're not experts in it. Delaware courts should apply Delaware law. The jurisdiction of the formation of your company is determined by (i) governing law to apply to formation and company governance documents (Delaware is very robust and well developed for businesses), (ii) taxes and annual fees and costs of maintaining a company in a certain jurisdiction, (iii) whether there is a physical location of a company, etc.
I'm a Delaware and Pennsylvania attorney, and I've negotiated transactions all of the country and world. Delaware is a very popular choice for entity formation because it also allows privacy of ownership and has well developed law for funds and holding companies for investor obligations, fiduciary duties of officers, board members, members, etc. This is a matter I have a lot of experience in. I'd be happy to discuss it further if you have any questions or need an attorney to support you in the transaction.