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As everyone should know, it is not wise to sign a legal contract without first contacting and consulting with an attorney. On almost a daily basis, we are faced with a request to sign legally binding contracts in a myriad of situations. The situations may range from online purchases of goods or services to home-improvement contracts and/or point of service purchases of goods. Unfortunately, in today’s fast paced society, it is nearly impossible to contact and consult with an attorney every time we are required to sign a contract. Accordingly, I will set forth below some contractual clauses that are typically contained in today’s modern consumer contracts which could have a significant and adverse effect on your ability to obtain justice in the event of a breach of contract situation.

The first potential pitfall is a “choice of venue” clause. Such a clause requires that, in the event of a litigation between the parties to the contract, the parties have agreed to litigate any such case in a particular court or jurisdiction. Thus, if you are a resident of New Jersey and you sign a “choice of venue” clause that requires any litigation to be brought in the State of California, you may not be able to sue the other party in the State of New Jersey and may be required to go to the State of California in order to bring suit. Of course, the potential cost of same may outweigh any benefit and, as such, such clauses should be avoided.

The second potential pitfall is a “jurisdiction clause.” In this type of clause, a consumer unknowingly will submit themselves to the “jurisdiction” of a court in another state. Thus, by way of example, in the event a company claims that you did not pay them for goods or services, they would have the right, pursuant to this clause, to file a lawsuit against you in another state. This would then require you, as a defendant in that matter to either physically go to that state to defend yourself or hire an attorney in that state. Once again, depending on the amount of money in dispute, the cost of same may outweigh any benefit in defending the case and, as such, such clauses should be avoided.

The third potential pitfall is an “arbitration clause.” Typically, such clauses are placed in consumer type contracts by a company that would like to avoid having to face a jury. A valid arbitration clause will prevent you from submitting your claim to a court and will further prevent you from being able to submit your claim to a “jury of your peers” for resolution. Of course, some industries which are not well received by jurors in general prefer disputes with customers to be resolved by the arbitration process (as opposed to court) in which an “independent” arbitrator, typically in the same industry, has the authority to decide the matter. From my perspective, any waiver of one’s right to go to court and have their disputes resolved by a jury is disadvantageous.

Of course, this is just a small sampling of contract clauses that should be avoided. There are number of other contractual clauses that may significantly limit your rights as a litigant. As such, it is important to have an attorney review the terms and conditions of any contract that you enter into in order to ensure that your rights are properly protected and that you are not giving up any rights that would ordinarily exist under the law. Further, it is also important to note that the mere existence of these clauses in a contract may not mean that the clauses are enforceable. In many cases, very specific language must be set forth in these contract clauses to make them enforceable. Thus, in the event of a dispute, it is equally important to have an attorney review these and other causes to determine whether or not same are, in fact, enforceable.



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