Jurisdiction Clauses in Contracts
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What is a jurisdiction clause?
Jurisdiction is the authority of a specific court or courts to hear disputes related to the contract. It answers where a lawsuit can be filed. Note that it’s not whose laws apply (that’s governing law).
Also known as: venue, chosen courts, forum, submission to jurisdiction, or place of litigation
What jurisdiction terms do most contracts have?
Based on data from more than 10,000 contracts:
The most common most common states for jurisdiction in sales contracts are:
Delaware (79%) California (12%) Florida (3%)
The most common states for jurisdiction in NDAs are:
Delaware (70%) California (10%) New York (7%)
Example jurisdiction language
Sample language from the Common Paper standard Cloud Service Agreement:
The parties will bring any legal suit, action, or proceeding about this Agreement in the state or federal courts in San Francisco, California, and each party irrevocably submits to the exclusive jurisdiction of such courts
Sample language from the Common Paper standard Mutual NDA:
Any legal suit, action, or proceeding relating to this MNDA must be instituted in the federal or state courts located in San Francisco, California. Each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding.
Risks to watch for in jurisdiction clauses
| ⚠️ Risk Type | Description |
|---|---|
| 🏛️ Inconvenient Forum | You might be forced to litigate in a faraway or unfriendly court, increasing costs and hassle. |
| 🔄 Conflicting Jurisdiction Clauses | Multiple documents (like a master and an addendum) may specify different jurisdictions. |
| 🚫 No Jurisdiction Specified | If left out, the court decides where the case is heard, which may not work in your favor. |
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