Clause primer
Jury trial waiver clause
Each party gives up its right to a jury trial in disputes about the contract, so a judge decides the facts.
Legal information, not legal advice. What a clause does depends on its exact words, the rest of the agreement and the governing law.
Also called: waiver of jury trial, jury waiver. Where you find it: Loan and credit agreements, guaranties, commercial leases, MSAs, purchase agreements and other commercial contracts that use court litigation rather than arbitration.
SAMPLE CLAUSE (INVENTED FOR THIS PRIMER)
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS IT CONTEMPLATES. EACH PARTY ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS WAIVER AND THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE OTHER PARTY TO ENTER INTO THIS AGREEMENT.
How it works
Conspicuous format
Capital letters or bold type help show the waiver was noticed. Courts in many jurisdictions consider conspicuousness when deciding whether a waiver was knowing.
Knowing and voluntary language
States that the waiver was made deliberately. These recitals support enforcement, although courts typically look at the circumstances as well as the words.
Scope
The phrase "arising out of or relating to" may reach claims connected to the contract, including some tort claims. A narrower clause may leave related claims open to a jury.
Counsel and inducement acknowledgment
Records that each side could consult counsel and that the waiver was part of the bargain. This helps where one party later argues unequal bargaining power.
Why it is there
A jury waiver gives the parties a bench trial, which many commercial parties view as more predictable, faster and less likely to produce outsized damages awards. Lenders, landlords and larger counterparties often require it. The clause tends to protect the party that expects to be a defendant on claims a jury may view sympathetically. It is also a choice that depends on the forum, since it matters only if the dispute is litigated in court.
How it works with other clauses
- Governing law and forum selection determine which jurisdiction's rules on waiver enforceability apply.
- An arbitration clause makes the waiver largely redundant for covered disputes, but the waiver still matters for claims carved out of arbitration.
- Limitation of liability and damages exclusions work alongside the waiver to reduce exposure to large awards.
- In related documents such as guaranties or security agreements, each document should contain its own waiver or clearly incorporate one.
Negotiating it
Who it protects: Usually the party expecting to defend against claims, often a lender, landlord or larger counterparty.
If it protects you
- Keep the waiver conspicuous and mutual, with knowing and voluntary language.
- Keep the broad scope covering related transactions.
- Repeat the waiver in each related document.
If it runs against you
- Standard ask: delete the waiver if a jury may favor your likely claims; fallback: limit the waiver to contract claims only.
- Confirm the waiver is mutual rather than binding only one side.
- Where the forum is a state that disfavors predispute waivers, consider whether the clause has any practical effect before spending negotiation capital.
Escalate before accepting: A one-sided waiver that binds only your side, especially in a dispute where your claims are the ones a jury would most likely hear, deserves escalation.
What AI explanations get wrong
- Stating that jury waivers are enforceable everywhere. Check: confirm the governing law and forum, since at least one large state generally refuses to enforce predispute jury waivers.
- Overlooking that the waiver is buried in small print. Check: confirm the clause is conspicuous, as many courts consider this.
- Assuming the waiver covers claims under related agreements. Check: review scope language and whether each related document contains its own waiver.
- Treating the waiver as an arbitration clause. Check: confirm whether disputes go to court or to arbitration.
Where the law varies
Federal courts and most states enforce knowing and voluntary jury waivers between commercial parties, but standards differ, and at least one large state generally refuses to enforce predispute jury waivers. The governing law and the forum both matter.
Sources
TOOLS
Need a primer like this for a clause in front of you? The Clause Primer Kit, included in All-access, produces one in this format inside the AI tool you already use, with checks built in. For reviewing whole agreements, see the Commercial Contracts Starter Pack.