Conflicting Provisions: Seeking Examples

You’re drafting a contract, as you’re in the habit of doing. You include a waiver of jury trial, for whatever reason. And you make California law the governing law. Or maybe Georgia law.

Well, for purposes of trials in state court, courts in California and Georgia have held that pre-litigation waivers of jury trial are unenforceable. See Grafton Partners, L.P. v. Superior Court, 116 P.3d 479, 479 (Cal. 2005); Bank South, N.A. v. Howard, 444 S.E.2d 799, 799 (Ga. 1994).

I mention this because I’m interested in combinations of contract provisions that create conflicts. The simplest form of conflict is when the laws of a given jurisdiction say that something’s unenforceable, but the mechanism might be more subtle than that.

Do you have examples of conflicts?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

6 thoughts on “Conflicting Provisions: Seeking Examples”

  1. The sort of provision your example illustrates is what I’d call a “hidden” contradiction, in that you’d have to know that the applicable law doesn’t permit what the contract requires. Examples abound: excessive temporal and geographic restrictions in non-compete agreements (or even the existence of such agreements in states that don’t permit them, either at all or in particular situations); definitions of confidential information that conflict with a state’s Uniform Trade Secrets Act and term of confidentiality that likewise conflicts; and international contracts that apply foreign law but which contain American (or generally common-law) concepts not recognized under the stipulated law. In many cases the drafter of the clause knows full well that it won’t be enforceable, but puts it there for the in terrorem effect on less-informed counter-parties.

    • You’ve got it. It’s standard when writing contracts of adhesion to put in a bunch of provisions which are invalid under local law but which can be used to scare the other party (who doesn’t know their rights) into not suing.

      This really ought to be illegal, but it’s not illegal as far as I know (!) and it’s not going to stop. It’s done intentionally.

  2. I encountered this once with an employment contract for a California employee that included a provision applying Texas law only later to find out that California does not allow employment contracts for California residents to apply any other law but California’s.

  3. Off the top of my head, I’m thinking about these, but I’m not sure if they’re what you’re looking for. (1) broad indemnities that may be limited or restricted by applicable state law, (2) no third-party beneficiary clauses with express third party beneficiaries in the same contract (e.g., indemnified parties and affiliates who may have use rights), (3) forum selection clauses that have service of process problems due to the forum selected, and (4) restrictive covenants such as non-competes that may be banned or void depending on the stated law.

  4. Don’t the Adams-disliked canons of construction offer some help in ranking conflicting provisions? For example, if California invalidates post-employment noncompete provisions, and a particular contract has a California choice-of-law provision and a noncompete provision, wouldn’t it be reasonable for a court to rule that (a) the specific trumps the general and (b) one presumes the parties didn’t intend an invalid provision when another interpretation is possible, wherefore the noncomplete provision is an exception to the California choice-of-law provision and must be judged in accordance with the default law source (often the law of the forum)?


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