Where can I sue or be sued?

A client comes to you with an already-executed contract. It is months or years later and something has gone awry. Your client says the other side has breached the agreement and they ask you for your advice. What do you do?

First (obviously), I read the contract. Among other things, I am looking for a provision that limits where the client can sue and what law would apply to the claims.

Contracts are the bedrock of commercial relationships. However, even the most meticulously drafted agreements can encounter disputes, and when they do, the choice of law, venue, and jurisdiction provisions can significantly impact the outcome.

At their core, these clauses determine the governing laws, courts, and legal systems that will apply when a contractual dispute, or breach, arises.

A well-crafted choice of law clause specifies what state's law will interpret and govern the contract, providing clarity and predictability.

The choice of venue provision dictates the physical location or court where any legal proceedings will take place, often factoring in convenience and familiarity with the subject matter. This can be as broad as a state (anywhere in Wisconsin) or as specific as a city (only in Milwaukee, Wisconsin).

Meanwhile, the choice of jurisdiction clause establishes the authority and power of a particular court system over the parties and the dispute. This can dictate only state court, only federal court, or either. This can also limit the case to arbitration or other alternative dispute resolution forums (more on that later).

Neglecting to include or improperly drafting these clauses can have severe consequences, such as increased costs, inconvenience, and uncertainty.

Parties may find themselves litigating in unfamiliar jurisdictions, subject to unfavorable laws, or facing challenges in enforcing judgments across borders.

So, when preparing to enter a contract--or drafting a contract--be sure to consider:

🗺️ the parties' locations;

🗺️ the contract's subject matter--and where the widgets are made or where the services are provided;

🗺️ what state's law could be most beneficial (or harmful);

🗺️ what jurisdiction could be most or least friendly.

It's crucial to balance considerations of neutrality, expertise, and familiarity while ensuring that the chosen law, venue, and jurisdiction are enforceable and aligned with public policy, because:

These provisions are not automatically enforceable. Courts will look at public policy ( for example: does a certain state have a greater interest in the outcome than another state). They'll also consider the convenience to the parties and whether the provision was negotiated at arms' length (among other things).

In the ever-evolving landscape of commercial agreements, by proactively addressing these provisions, we can mitigate risks, protect our clients' interests, and ensure that disputes are resolved efficiently and predictably.

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