Draft Jurisdiction Clause In Agreement

Do you want all possible disputes to be decided by a particular court? If so, the clause should be extended to avoid controversy over whether a particular dispute is within the scope of the clause. Under English law, the courts have given clear guidance on this issue and, provided that the clause is broad to cover all disputes arising from an agreement, including all disputes relating to its existence, validity or termination, which should suffice.11 The choice of non-exclusive jurisdiction provides in principle that disputes are tried before the courts of a particular court, but without prejudice to the right of either party to raise a dispute in the courts of any other jurisdiction. Such clauses create security to the extent that you know that disputes can be heard in a particular jurisdiction that you find attractive, but if jurisdiction is to be required elsewhere, it is available. Although they offer greater flexibility, there is a risk of parallel proceedings, particularly where the parties or one of them are domiciled outside the European UNION.5 Ideally, professional advice should be obtained on the form and content of existing legislation and on jurisdiction clauses for a particular contract. However, if this is not feasible, the principles outlined above can help to avoid some of the problems encountered. Whether or not an exclusive jurisdiction clause is used depends on the facts of this case. For example, in a share purchase agreement, a seller will probably prefer an exclusive jurisdiction clause, since the seller is the most likely party sued, and he may want certainty of where it will be. The risk of being sued in foreign courts with uncertain jurisdiction is not attractive. On the other hand, in a contract to purchase shares, the purchaser may wish for a non-exclusive jurisdiction clause in order to be sure that he can bring an action before the English courts (or the courts, regardless of the jurisdiction chosen) and in the courts of any other jurisdiction in which the seller owns or may have assets. A recent decision by the Court of Appeal for Ontario reminds us that parties who use their contracts to choose a jurisdiction for hearing disputes must carefully consider jurisdiction clauses. There are also a number of factors to consider when drafting such a clause: here is a typical clause: “This agreement is governed by the laws of [Thailand/England/Singapore/etc].

Not necessarily like that.

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