San Jose, CA asked in Contracts and Business Law for California

Q: Removing these 2 clauses from Contract - implications?

I do freelance legal billing for attorneys and law firms. Currently, a potential client (law firm) wants to remove the Choice of Law and Choice of Forum clauses in my agreement. They are located in Nevada, while I'm located in California (location where the clauses are applied). What implications could this have if we just completely remove the 2 clauses?

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2 Lawyer Answers
James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Sacramento, CA
  • Licensed in California

A: If the Choice of Law and Choice of Forum clauses are removed from your contract, there will be uncertainty regarding which state's laws apply to any disputes that arise. Normally, these clauses ensure that any legal matters are resolved according to the laws of a specific state and in a designated court or location. Without them, both parties could potentially argue for the applicability of the law and court system more favorable to their situation, which could lead to a lengthy and costly legal battle just to determine jurisdiction.

In your case, removing these clauses could mean that disputes will be governed by either California or Nevada law, depending on various legal principles like where the contract was executed or where the performance of the contract occurs. If a dispute arises, you might be required to engage in legal proceedings in Nevada, which could be inconvenient and expensive for you given your location in California. Conversely, if the law firm finds California law to be unfavorable, they might resist settling disputes there.

Lastly, without predetermined legal jurisdiction, both parties may face increased legal fees and time spent on litigation, as initial proceedings could revolve around establishing jurisdiction before addressing the actual dispute. It’s advisable to consider whether the potential for increased flexibility is worth the potential for increased costs and uncertainty. Consulting with an attorney to understand the full implications based on your specific circumstances and to explore possible compromises or alternatives might be beneficial.

Adam Stoddard
Adam Stoddard
  • Santa Clara, CA
  • Licensed in California

A: If you omit those two clauses, then you are potentially opening up the chance to be compelled to Nevada if there is any litigation regarding the contact itself or work you are contracting for. Also, if you want to start litigation in California for the same, the other party could attempt to compel the litigation in Nevada since the contract is silent on the subject. Those are pretty standard clauses in just about every contract. The parties should pick one state or the other so there is no ambiguity in the future.

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