Governing Law & Jurisdiction Clause in a Lease

What does the Governing Law & Jurisdiction Clause mean in a Lease?

This clause means that the parties in a legal contract agree where a suit is to be litigated if it comes to that. The parties can litigate anywhere, not necessarily where one of the parties lives or does business. If you are writing the contract, you should put in the contract a location that is convenient to you and where you think the jury pools and judges are to your advantage. Example: I entered into a JV agreement with someone to develop land in a western state. The deal went bad and I sued them and we had agreed in the contract, the suit had to be held in my home state and county. The cost for them to travel, etc, was going to be expensive and they were more encouraged to settle, which they did in my favor.

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However, and this is very important, in an eviction proceeding (where the landlord wishes to evict a tenant), the eviction must take place in the county where the property is located.

For more about Governing Law, click here.

This link in blue is from About.com and is also a good explanation and is good source for more residential real estate information.