Which country should have exclusive jurisdiction in a simple software development contract?

Question

There's a simple contract template going around design and development communities that includes this clause:

Although the language is simple, the intentions are serious and this contract is a legal document under exclusive jurisdiction of English and Welsh courts.

Regardless of the rest of the template, if a contractor sends this contract to an American client:

• Would the American client refuse to have to potentially deal with non-American courts, in the possibility of a conflict?
• Should the contractor pick just one court (English OR Welsh)? What happens if there's an issue and English and Welsh laws disagree on that specific point?
• Could the contract stipulates that is enforceable under exclusive jurisdiction of American, English and Welsh courts, but that the Welsh one takes precedence?

What is simpler and best for both parties, considering the extreme unlikeliness that such a minor project would end up in court?

Answer 1

Would the American client refuse to have to potentially deal with non-American courts, in the possibility of a conflict?

Some might, but probably not all. Most wouldn't bother to read it; others who do won't understand what the jurisdiction provision means.

Should the contractor pick just one court (English OR Welsh)?

No. England and Wales is a unified legal jurisdiction. The two countries share a single court system.

Could the contract stipulates that is enforceable under exclusive jurisdiction of American, English and Welsh courts, but that the Welsh one takes precedence?

If US courts have jurisdiction and English-and-Welsh courts have jurisdiction, then there is no exclusive jurisdiction.

Answer 2

Since this is a template, users may change aspects if they wish. If both parties to a contract to be made using this template are in the same country, and that country is not England or Wales, they might well wish to change the provision to specify the country that they are both in. If they are in different countries, but neither is in England or Wales, they might one to select one of the country of one of the parties, or some convenient third country. However, as the answer by phoog points out, it is quite likely that n either party will notice this provision nor consider what its effects would be if an issue under the contract had to go to court.

It is not illegal to specify that a contract will be governed by the law of a country where neither party is located, but it is a little unusual and often not convenient. How the courts of a country where one or both parties are located will interpret such a provision if a suit over the contract is brought in such a country varies. It may not be enforced as written.

Should the contractor pick just one court (English OR Welsh)? What happens if there's an issue and English and Welsh laws disagree on that specific point?

As the answer by phoog points out, England and Wales share a single legal system, so their laws will not disagree. That is why in legal matters the proper term for the jurisdiction is always "England and Wales", not just "England" or just "Wales"

Answer 3

None

This is a choice of venue clause and it may be ineffective.

A contract cannot dictate to a court whether they have jurisdiction - that is the prerogative of the court to decide. In the present example, if a US court decides the matter falls within its jurisdiction then the wording in the contract is irrelevant - you cannot contract outside the law.

A much better wording is that the contract is under the “law and non-exclusive jurisdiction of England and Wales.”

This asks the US court to defer to the courts of E&W which it is far more likely to do that being told to do so - courts don’t like being told what to do by litigants.

It also introduces a choice of law clause which the original didn’t. This means that, no matter which court hears the case, it will be determine using English and Welsh contract law. Of course, there are many foreign laws that cannot be excluded by contract (consumer protection, health & safety etc.) and while the contractural dispute will be determined by E&W law, those laws may have an impact.