Business Contract Dispute

UPDATED: Oct 1, 2022

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Business Contract Dispute

If Wa State LLC business has ontract with Europian company Norway in particular which Court would have legal jurisdiction over any future dispute? I was asked to alter this part of the contract from WA State Courts to NY State governing law . Should this be done or not?

Asked on September 7, 2017 under Business Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the contract states that a certain country or (within a country) state has jurisdiction, that clause or term will be enforced: the parties to a contract can choose any court to have power over their case. (E.g. if you are in WA and your counterparty is in Norway, you could nonethelessgive jurisdiction to Tasmanian courts.) If the contract does not specify, under U.S. law, any country or state which has a sufficient connection to the contract can exert jurisdiction. That generally would be either the WA courts or the Norweigian ones, since with one party in either location, either court has an equal claim to an interest in the outcome; in this instance (not specified by contract), it may come down to who filed first in their local court, since either court could assert jurisdiction (both courts have 1 of the contracting parties within their jurisdication). 
You can also specify governing law independent of specifying jurisdiction--i.e. you can WA courts apply Norway's law, or vice versa, or have both parties "meet in the middle" in NY. It's whatever the parties mutually agree to.

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