Boilerplate Provisions: Choice of Law
Boilerplate provisions are the standard legal provisions found at the end of a contract. These provisions are critical, even though most people tend to overlook the fine print of a contract. One of the most common issues with online legal forms is that they fail to include standard legal provisions for California. Failing to include an essential clause might cost you massive damages and legal fees.
Here we will explain some of the provisions commonly included in California agreements, such as Choice of Law, Jurisdiction, and Venue. It is always beneficial to hire a lawyer to help you parse through these provisions. It is also important to note, that with all the rules that go into establishing the legitimacy of a clause, they are not always enforceable even if included in a contract.
Choice of Law
States and Countries all have their own varying set of laws. So, it is uncertain which law will apply when contracts involve parties from other states or countries, or when things are sent to a different place. Civil Code section 1646 establishes choice of law in California. A contract should be read according to the “law and usage” of the “place where it will be performed” or if no location is specified, the place where the contract is “made,” according to that clause.
It is increasingly harder to determine where a contract is established or where it is to be performed in a world where so much occurs on the internet. As a result, it’s necessary for the parties to agree ahead of time on which state or country’s law will be used for the contract’s interpretation. Once a location has been set, the contract’s choice of law clause will specify which laws will apply. If there is no choice of law provision in the contract, you may need to hire a costly attorney to figure out which laws apply to the contract before the fundamental issues in the case are ever addressed. The location that is chosen can make or break the case for you.
Simply because you have a choice of law option that uses California law does not ensure that your lawsuit will be heard there. Without a jurisdiction clause, you may be forced to retain counsel elsewhere if you are sued in a different state or foreign country. It is crucial that the jurisdiction provision expressly states that the parties consent to personal jurisdiction and that the types of disputes that will be subject to this jurisdiction be specified.
Non-exclusive and exclusive are the two types of jurisdiction clauses. A non-exclusive jurisdiction clause states where the parties may litigate, though it does not bind them to a single place. An exclusive jurisdiction clause specifies where they must litigate. It’s crucial to talk about these clauses with your lawyer to figure out what’s best for you.