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Waiver of jury trial
Also called jury waiver, jury trial waiver.
A clause in which both parties give up the right to a jury in any dispute arising from the agreement, leaving the case to be decided by a judge.
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What it means
It sits near the end of most commercial finance agreements, usually in capitals, next to the choice-of-law, venue and arbitration provisions. The commercial logic is that judges decide contract disputes on the documents while juries introduce sympathy and unpredictability — and in disputes between a small business and a funder, unpredictability generally favours the small business.
Enforceability of pre-dispute jury waivers varies by state and by court. Federal courts generally enforce them where the waiver is knowing and voluntary, looking at factors like conspicuousness, the parties' relative bargaining power and business sophistication. Some states are markedly less receptive to pre-dispute waivers as a matter of state constitutional or statutory law — California is the most cited example of a state whose courts have generally declined to enforce them outside statutory exceptions. Which body of law applies is itself contested, and turns on the forum and on the choice-of-law clause.
It travels with related clauses that matter as much: forum selection fixing where suit must be brought, choice of law fixing which state's rules apply, service-of-process provisions, and in some agreements an arbitration clause with a class action waiver.
Where this one catches people
Owners scan past it because it looks like the boilerplate at the back and because they do not intend to sue anyone. Its effect is felt when they are the defendant. Combined with a forum selection clause naming a distant state, it means defending a claim in front of a judge, in a court hundreds of miles away, under another state's law, with local counsel retained for the purpose — and the cost of doing that is frequently what decides whether a merchant defends at all.
Where you will meet this term
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Waiver of jury trial — common questions
What does waiver of jury trial mean?
A clause in which both parties give up the right to a jury in any dispute arising from the agreement, leaving the case to be decided by a judge.
Where does waiver of jury trial catch people out?
Owners scan past it because it looks like the boilerplate at the back and because they do not intend to sue anyone. Its effect is felt when they are the defendant. Combined with a forum selection clause naming a distant state, it means defending a claim in front of a judge, in a court hundreds of miles away, under another state's law, with local counsel retained for the purpose — and the cost of doing that is frequently what decides whether a merchant defends at all.
Is waiver of jury trial the same as an interest rate?
Waiver of jury trial is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does waiver of jury trial apply to?
Merchant Cash Advance, Working Capital, Term Loan, Business Line of Credit, Invoice Financing.
Is there a worked example of waiver of jury trial?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside waiver of jury trial?
Arbitration clause, Choice of law, Confession of judgment, Jurisdiction clause, Warrant of attorney.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.