Thursday, February 12, 2009

What did you Agree To? Jurisdiction.

In the second part of this series, we are going to look at an often overlooked part of a contract. The location or jurisdiction you agree to file any dispute in.

What am I talking about? Well in many contracts, especially those over the Internet, there is a little clause that says you agree to go to their state/province if you have a dispute.

Here is an example from GMail's Terms and Conditions;

" You and Google agree to submit to the exclusive jurisdiction of the courts located within the county of Santa Clara, California to resolve any legal matter arising from the Terms."

The actual phrase is called "Forum Selection". The contract selects a forum, or location for disputes to be heard. in this case it is Santa Clara California.

Let me put this another way. If Google do something to your GMail that you feel you can sue them over, you need to do it in California. If you try to sue them in any other location, they will simply argue the agreement is clear that these issue need to be addressed in California. The court will probably rule that Google are correct, and the court has no jurisdiction over the issue. It's thrown out.

What does this mean for you?

This means that when you are contracting with someone, the court or places you can go to lodge a complaint may be limited to their location. Sometimes it is at the location of the companies head office.

You need to understand that this may complicate you getting the issue resolved if it turns into a legal battle. These clauses can also apply to Arbitration and Mediation as I discussed in the last segment.

Let's say you hire a graphic and website design company from Salt Lake. You are located in Memphis. The company just does not live up to their promises, and you feel you are owed a refund. But they have a clause in the contract that says, you agree to file any disputes in Salt Lake.

Well now you are looking at additional costs, and headaches to try to fight it. This extra hassle may be enough for you to just brush it off.


If you are in this situation, then you can use the box at the top right, or link at the bottom to ask a lawyer online for their opinion on your situation. With that information you can then decide how to proceed. You can also send me a message, and I will push you in the right direction.

If you are about to enter a contract, with one of these clauses, make sure you pay with a credit card. Credit Cards have very robust consumer protection, and often a refund, or charge back can be processed without having to go to court.

There is nothing wrong with a Forum Selection clause. As a consultant I always recommend businesses have one in their contracts. It keeps frivolous claims down, and controls legal costs. However as a consumer you now have to fight uphill to get what is rightfully yours.

Do not become overly concerned with a Forum Selection clause. Just be aware of it. Try to use credit cards with good protection. If in doubt send me a message and I will try to lead you in the right direction.

In the next segment I will discuss what Indemnity is, and why it is important.

Until then.


Copyright © 2009 Peter MacSweeney. All rights reserved. Reproduction in whole or in part without the express written consent of the author is forbidden. Contact the author through the comment form for all inquiries, including media.

Enter your email address:

Or clickSubscribe By Email

Ask Your Legal Question Now. Response in MINUTES.

No comments:

Post a Comment



Trace AnyoneTrace AnyoneTrace Anyoneplay race car gamesFree Links Direct