Jurisdiction Clauses: Why They Matter More Than Founders Think

Introduction

Most commercial disputes never make it to court. A phone call, a coffee, or a polite "let’s move on" usually does the job. But when things do escalate, one clause suddenly becomes extremely important: jurisdiction and choice of law.

If you’ve never dealt with a dispute outside your home country, you probably don’t want to learn the hard way what it’s like explaining your contract to a judge in a foreign language and an unfamiliar legal system.

A Real Example: Litigating Abroad During a Pandemic and a War

A Ukrainian client once found himself litigating in Herzliya during a global pandemic, while a war was unfolding back home - because a standard commercial agreement included a law and jurisdiction clause placing the dispute in Israel. By the time the parties realized how inconvenient, complex, and costly this was, it was too late. The clause governed.

Why Jurisdiction Matters (More Than You Think)

• Litigation abroad is expensive—financially and emotionally (flights, translations, foreign counsel).
• You lose home-court advantage—language, procedure, and legal norms become irrelevant overnight.
• Time zones turn even routine coordination into logistical friction.
• Law and jurisprudence differ widely—the same wording can be interpreted very differently across jurisdictions.

Why the Wrong Clause Can Haunt You

Many standard contracts contain ambitious jurisdiction clauses—copy—pasted templates, attempts to please “global partners,” or overly creative drafting.

But creativity is not a virtue here. The purpose of a jurisdiction clause is predictability, not poetry.

How to Choose the Right Jurisdiction Clause

• Keep it simple: choose one jurisdiction you (and your counsel) actually understand.
• Match the clause to business reality: if both parties are in Israel, Israeli courts are usually the practical default.
• If the counterparty is abroad, consider arbitration or a neutral forum for long-term cross-border deals.
• Avoid copy-paste—big-company boilerplate may not fit startup risk.

Checklist: What Good Jurisdiction Clauses Include

• Clear choice of law
• Exclusive or non-exclusive jurisdiction (stated explicitly)
• Option for mediation or arbitration (when relevant)
• Language clarity (yes—this can matter)

Founder Tip

If you’re signing a contract with a foreign party and the clause says you must litigate in their country—negotiate. Even small startups often have more leverage than they think.

Conclusion

Most disputes will never see a courtroom. But if they do, your jurisdiction clause decides the battlefield. Make sure it’s a place you can pronounce, navigate, and ideally… drive to.

Need help reviewing or drafting your commercial agreements? Happy to help. Reach out anytime.

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