Why Have a Jurisdiction Clause?

Why Have a Jurisdiction Clause?

In a normal commercial contract, when the parties wish their disputes to be heard by a court (as opposed to arbitration - see Arbitration or Litigation...? to help decide) a jurisdiction (otherwise known as a "choice of court") clause needs to be included because:

(i) the chosen court is likely to accept jurisdiction on the basis of the parties' choice if you sue there;

(ii) to the extent that the clause is exclusive, other non-chosen courts may decline jurisdiction on this basis;

and (iii) since the clause amounts to a submission by each party to the jurisdiction of the named court, the resulting judgment can be more likely to be enforceable in other countries.

See Which Jurisdiction Clause for guidance as to which type of clause to use in which situation, and more on the operation of each type.

(NB: When, by contrast, the parties have chosen to arbitrate their disputes it may be that the drafting of their arbitration clause sometimes incorporates elements regarding certain aspects of the relationship between arbitration and the courts (e.g. a jurisdiction clause in support of arbitration, or an option to litigate). If you are looking for information on such matters, please refer to the arbitration section of this site).