We spend a lot of reviewing contracts for our clients. Often the contract is clear on “Choice of Law”, and less clear on “Jurisdiction”.
When a contract has a “Choice of Law” clause it is telling the Court which state law applies. So if my client in Massachusetts does business with a client in California the “Choice of Law” portion of the contract will dictate which substantive state law governs the contract (regardless of where the case is tried).
That is different from “Jurisdiction”. “Jurisdiction” determines what Court, in what state, the parties agree to have their case tried in.
Having the Jurisdiction in your favor can save you time, effort and money. It is also a bargaining chip. If you have a commercial debt collection case go to trial, it’s a lot easier when the location of the trial is close by. Conversely, the debtor, in order to defend will be forced to find an unfamiliar lawyer in an unfamiliar jurisdiction and fly his witnesses to the location of the trial. This will increase his costs considerably.
Because the goal is often to bring the other side to the table, contracting for your choice of jurisdiction is another arrow you want to have in your quiver.