Option 1: This Agreement is governed by the laws of the State of __________________ applicable to contracts executed and performed without reference to conflict of laws. Any disputes arising under this Agreement shall be subject exclusively to the jurisdiction of the state and/or federal courts having jurisdiction over ________________County. Each party will submit to the sole and exclusive jurisdiction of such courts in connection with any such dispute.
Option 2: Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by ____________. The number of arbitrators will be __________. The place of arbitration will be __________. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
We provide two examples of common contract clauses governing disputes arising out of the contract. Most publishing contracts contain one or the other clause, but not both.
Option 1 is an example of a jurisdiction clause. It determines the state and court in which disputes arising out of the contract will be litigated. As a general matter, New York State law tends to favor authors, and New York State has developed a large body of case law governing publishing disputes over the years.
Option 2 is an example of an arbitration clause. If you agree to such a clause, you will be bound to arbitrate most contractual disputes with your publisher. You will be foregoing the right to bring a lawsuit, with few exceptions for wrongdoing or breaches that affect your rights beyond the contract. Arbitration is a quicker, though not always cheaper, alternative to litigation. Even if your contract does not contain an arbitration clause, you may nevertheless arbitrate the dispute by mutual agreement. This is to say that an arbitration clause is not necessary in order to arbitrate; however, any clause, whether jurisdiction or arbitration, can exclude the other if it is written as such.
Publishers rarely, if ever, negotiate these clauses, since they are interested in litigating the contract or engaging in arbitration in a venue that is most convenient for them.