Ep 167 - Will the Flip Clause Enter the Canon?

About this episode

The episode discusses the potential acceptance of the 'flip clause' in sovereign debt markets and its implications.

Will the Flip Clause Enter the Canon? Contract innovation is rare in sovereign debt markets, so we are interested whenever someone adds a new clause to the existing set of canonical forms. A number of innovations have appeared in 2025, one of which is the "flip clause." The clause allows investors to opt out of the governing law and enforcement jurisdiction initially chosen in the debt instrument. We have some questions about the clause and doubt that in its current form it will gain widespread acceptance. Right now, it seems more symbol than substance — a way to metaphorically flip off the New York legislature. Producer: Leanna Doty

People in this episode

Hosts: Mitu Gulati, Mark Weidemaier

Topics covered

• sovereign debt
• contract innovation
• legal clauses
• governing law
• financial markets

Keywords

• flip clause
• sovereign debt
• contract innovation
• governing law
• financial instruments

Mentioned in this episode

Organizations: New York legislature

Books & works: Flip Clause

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