• February 2020
    M T W T F S S
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What kind of jurisdiction and which country’s law would apply to a mutual NDA between companies in different countries? Would the United Nations Convention on contracts apply here?

The only way to get a foreign business into a US court is to include a provision in the NDA that requires the manufacturer consent to US jurisdiction. Without such wording, an international company can only be brought to a US court for violating an NDA if it does substantial business there. As a result, most NDAs will include a provision that details which jurisdiction controls. Similarly, an NDA should provide which country’s law applies when enforcing the agreement. Typically the provision will provide for either “exclusive” or “non-exclusive” jurisdiction. The meaning of these terms differ across various legal systems, but “exclusive jurisdiction” usually means that only the specified courts will have jurisdiction to hear disputes; and “non-exclusive jurisdiction” are those courts that can hear disputes but the parties are not prevented from litigating in other courts as well, or instead, if they think it is proper to do so.

One piece of advice – make sure to separate the clauses that address governing law and jurisdiction. The two concepts are unique from one another, and the contract should address them separately and expressly. If the NDA includes one of the clauses and not the other, a court will not automatically assume that the jurisdiction and controlling law should be the same so it’s important to include both.

The attorneys on LawTrades have a ton of experience working with international business issues. Drafting an NDA that protects a US company internationally, or vice versa, is something our legal platform can help you with.