Contract trap · Any contract
Foreign forum & law
The contract is governed by California/Delaware/Utah/Irish/Cypriot or 'tribal' law with exclusive jurisdiction of courts far from you — or, in RU, «подсудность по месту нахождения Банка/Компании» — sometimes purporting to waive home-country protections or usury caps.
- Severity
- Expensive
- How often it turns up
- Common
- Holds up?
- Depends where you are
- Clause phrases
- 22
What it looks like in a contract
Redline matches these phrases against your document verbatim. Drafters rarely invent new wording — they copy it, which is why the same sentences turn up across unrelated contracts.
In English-language contracts
- governed by the laws of the State of California without regard to conflict of law principles
- exclusive jurisdiction of the state and federal courts located in Santa Clara County
- the courts of Ireland shall have exclusive jurisdiction
- laws of the State of Delaware
- laws of the State of Utah
- this loan is governed by tribal law
- sovereign immunity
- you waive any objection to venue or forum non conveniens
- any claim shall be brought exclusively in
- you consent to the jurisdiction of
In Russian-language contracts
- регулируется законодательством штата Калифорния
- регулируется законодательством Республики Кипр
- регулируется законодательством Ирландии
- применимым правом является право
- регулируется и толкуется в соответствии с законодательством
- исключительная подсудность
- споры рассматриваются в суде по месту нахождения Компании
- споры рассматриваются в суде по месту нахождения Банка
- подсудность по месту нахождения Кредитора
- в Арбитражном суде города Москвы
- договорная подсудность
- по месту нахождения филиала Банка
Check your own contract
Paste a clause, a page or the whole document. Nothing leaves your browser: the matching runs here, on this page, against the phrases above.
Why it bites
Litigating in Santa Clara County or Dublin is impractical, so default judgments pile up and small claims die; rent-a-tribe and offshore law are used to escape usury caps; the wording misleads consumers into believing they have no local remedy (CJEU VKI v Amazon 2016).
Is it enforceable where you are
The same clause can be routine in one country and void in another. What follows is what the law says where you are — not advice on your particular contract.
In the US, unconscionability and the FTC Act §5 bar on unfair and deceptive practices are the general backstops; in the EU and the UK, consumer standard terms are tested under Directive 93/13 and the Consumer Rights Act 2015.
United States
Forum-selection clauses presumptively enforceable (Carnival Cruise Lines v. Shute 1991) unless unreasonable or against strong public policy; some states protect resident consumers/employees (CA Labor Code 925; Minn. Stat. 181.988); 'rent-a-tribe'/'rent-a-bank' schemes attacked by the CFPB, state AGs and courts (Think Finance/Plain Green settlements 2019; CashCall/Western Sky).
- Cited
- Carnival Cruise Lines v. Shute
- CFPB
European Union
Brussels I-bis Arts 17-19 — consumer sues at home and can be sued only there; Rome I Art 6 — choice of law cannot strip home mandatory protections; CJEU C-191/15 VKI v Amazon EU (2016) and C-240/98 Océano (2000).
- Cited
- C-191/15
- C-240/98
- VKI v Amazon EU
United Kingdom
CRA 2015 s.74 (non-UK law does not remove CRA protection for UK-connected contracts) and Sch 2 para 20; consumer jurisdiction rules in CJJA 1982 ss.15B-15E; B2B clauses enforced.
- Cited
- CJJA 1982 ss.15B-15E
- CRA 2015 s.74
Russia
ст. 17 ЗоЗПП — иск по месту жительства потребителя; ст. 16 п. 2 пп. 2 — ограничение выбора подсудности ничтожно; ст. 1212 ГК — императивные нормы страны потребителя; 353-ФЗ ст. 13 ч. 2-3 — иски кредитора только в пределах субъекта РФ по месту жительства заёмщика; «по месту нахождения банка» — ущемляющее условие (ВАС РФ письмо № 146/2011); Пленум ВС № 17/2012 п. 22, 26.
- Cited
- 353-ФЗ
- Пленум ВС № 17/2012
- ст. 1212 ГК
- ст. 13 ч. 2
- ст. 16 п. 2 пп. 2
- ст. 17 ЗоЗПП
Where this has actually happened
Regulator actions, court rulings and the contracts they were fought over.
- Verein für Konsumenteninformation v. Amazon EU Sàrl (CJEU C-191/15, 28 July 2016)
- Océano Grupo Editorial v. Murciano Quintero (CJEU C-240/98, 2000)
- LinkedIn User Agreement — non-EU users' claims 'can be litigated only in the federal or state courts in Santa Clara County, California'
- Think Finance / Plain Green tribal-lending settlements (2019)
- ВАС РФ письмо № 146 (2011) — подсудность по месту нахождения банка ущемляет права потребителя
What to do
In order, from the thing that takes a minute to the thing that takes a letter.
- EU/UK/RU consumers may sue at home and keep mandatory local protections regardless of the clause (RU: ст. 17 ЗоЗПП
- 353-ФЗ ст. 13 — the lender's suits must stay within your region)
- US: check state statutes protecting resident consumers/employees and the 'true lender' doctrine against tribal or out-of-state law
- SMB: negotiate a neutral venue or the defendant's location.
Traps that travel with it
Drafters who use one of these usually use several.