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Verify Your States Dispute Laws

Posted by on Apr 5, 2009

Clickbank has a new contract which everyone who participates with them has to digitally agree to. I know most people don’t take the time to even look at these contracts. I’m a little better in that I do usually glance at them, looking for something to stand out that I might not like.

Anyway, I’m not going through the entire contract here, but only one small piece of it. And, since I read the entire contract and saw nothing which said I can’t repost it, this is the clause I’d like to talk about:

# Governing Law; Dispute Resolution. You agree that Idaho law will govern this Agreement, other than such laws, rules, regulations and case law that would result in the application of the laws of a jurisdiction other than the State of Idaho, and that any action, suit, proceeding, or claim arising out of or related to this Agreement must be brought exclusively in federal or state courts located in Boise, Idaho. You hereby submit to the in personam jurisdiction and venue of such courts and waive any objection based on inconvenient forum. YOU HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING UNDER OR IN RELATION TO THIS AGREEMENT.

Dispute resolution is something that most companies would rather have than having to go to trial. They do this for two main reasons. One, costs are greatly reduced. Two, because juries tend to initially be on the side of potential victims, not companies that seem like they’re piling on the “little guy.” So, going to dispute resolution, they feel, gives them not a balance, but an edge, because they can still send as many lawyers as they wish, while the plaintiff usually won’t have the resources to mount a real challenge, nor feel they’re going to get any sympathy from the judge, which may or may not be true.

Anyway, you can see above that Clickbank uses Idaho as their base for dispute resolution. Companies usually look for a state where they feel they can get the best deals from the law. Many companies use Florida also; maybe it’s just statistics, because I know no one is saying these guys are on the take. However, they may be pro-business; I’m really not sure. However, the main point in the above clause is this one: “other than such laws, rules, regulations and case law that would result in the application of the laws of a jurisdiction other than the State of Idaho“. Why is this so important to know about?

Because some states, such as New York, don’t allow that law to apply. So, if I have a complaint against anyone, I can still file a claim against them in this state and it totally invalidates this clause in the contract. I pointed out that little piece of law a few years ago when my wife was going to sign a contract to do some part time work with this one company, and got them to alter the contract acknowledging it. I could look up the law if need be, but since I know this one, I feel pretty secure in putting it out there.

Anyway, my hope is that everyone else knows at least this portion of the law for where they live, as a “just in case” backup should something negative occur. After all, many of you reading this blog are hoping to make money off some of the products you sell, but, as you saw in my post about the one affiliate not paying me, you just never know.

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This does not surprise me, and it makes sense that companies would want to specify a jurisdiction which offers a more favorable legal environment from their point of view.

I pity the poor souls who are not fortunate enough to live in a state which does not have it’s own laws which override the provision which you refer to.

Andrew´s last blog post..The shopkeeper who did not like ‘nigger money’

April 6th, 2009 | 8:49 AM

You’re right, Andrew, but truthfully, I’m betting most people have never read through any of these affiliate program terms of service to see these things. I do, and luckily I’m protected here in NY (whereas, it hurts me in some other areas being here). Also, luckily, most people never need to use it.

April 6th, 2009 | 8:57 AM