Is a jurisdiction clause valid in a contract with a consumer?

In many countries, a clause that forces a consumer or an employee to sue far from home is unenforceable or deemed unwritten. These protective rules apply whatever the contract says, so reserve the clause for contracts between businesses.

What is the difference between a jurisdiction clause and an arbitration clause?

A jurisdiction clause chooses a state court, whose judgment can be appealed. An arbitration clause removes the dispute from state courts and entrusts it to private arbitrators whose award is final, subject only to limited annulment grounds.

Which court should I choose for a contract with a foreign company?

Choose the court of the country where the other party holds assets or where a judgment will be easiest to enforce. If enforcement abroad is uncertain, arbitration is often more effective because awards circulate under the New York Convention.

Clause templatesDisputes

Jurisdiction clause

A jurisdiction clause names the courts that will decide disputes between the parties. It removes uncertainty about where to sue, avoids parallel proceedings in several cities or countries, and lets each party anticipate travel, language and legal costs.

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Clause template

1. This contract is governed by the laws of [COUNTRY]. 2. Any dispute arising out of or in connection with the formation, validity, interpretation, performance or termination of this contract shall be submitted to the exclusive jurisdiction of the courts of [CITY], [COUNTRY]. 3. This clause does not prevent either party from applying to the competent court of its choice for urgent or interim measures, including summary proceedings, or for the enforcement of a judgment. 4. Before bringing any claim, the parties shall first apply the amicable settlement procedure provided for in this contract, where such a procedure exists. 5. This clause shall survive the expiry or termination of the contract.

Replace the bracketed items before use.

Variants

Non-exclusive jurisdiction

Any dispute arising out of or in connection with this contract may be brought before the courts of [CITY], [COUNTRY], which the parties accept as competent. This choice is non-exclusive: each party also remains free to bring proceedings before any other court that has jurisdiction under the applicable rules.

Defendant's home courts

Any dispute arising out of or in connection with this contract shall be brought before the competent courts of the place where the defendant has its registered office or principal place of business at the time the claim is filed. Where several defendants are sued together, the claimant may choose the courts of the place of any one of them. This clause does not prevent either party from seeking urgent or interim measures before the court of the place where the measure must be enforced.

When to use it

A contract between companies based in different cities or countries
A supply or service contract where you want disputes heard near your head office
A distribution or partnership agreement with a foreign counterparty
Any contract where you have decided not to use arbitration

Mistakes to avoid

Naming a country without a city or court, which leaves room for argument over territorial competence
Mixing a jurisdiction clause and an arbitration clause in the same contract without stating which one prevails
Imposing a distant court on a consumer or employee, where such clauses are often unenforceable
Choosing a court in a country where a judgment will be hard to enforce against the other party's assets

Country-specific notes

France
A clause that departs from the rules on territorial jurisdiction is deemed unwritten unless all parties contracted as merchants and the clause appears very prominently in the commitment of the party against whom it is invoked.
Source: Squire Patton Boggs, La clause attributive de juridiction (Code de procédure civile)

Contracts that use this clause

Frequently asked questions

In many countries, a clause that forces a consumer or an employee to sue far from home is unenforceable or deemed unwritten. These protective rules apply whatever the contract says, so reserve the clause for contracts between businesses.

Other Disputes clauses

Sources

Squire Patton Boggs, La clause attributive de juridiction

Indicative template, to adapt to your situation. It does not replace legal advice.

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Variants

Non-exclusive jurisdiction

Defendant's home courts

Mistakes to avoid

Naming a country without a city or court, which leaves room for argument over territorial competence

Mixing a jurisdiction clause and an arbitration clause in the same contract without stating which one prevails

Imposing a distant court on a consumer or employee, where such clauses are often unenforceable

Choosing a court in a country where a judgment will be hard to enforce against the other party's assets

Country-specific notes

France

A clause that departs from the rules on territorial jurisdiction is deemed unwritten unless all parties contracted as merchants and the clause appears very prominently in the commitment of the party against whom it is invoked.

Squire Patton Boggs, La clause attributive de juridiction (Code de procédure civile)