An open letter regarding choice of law and forum selection

Dear Counterparty,

My Illinois client and I have worked hard to develop a contract template that is both fair and suits our business needs.  While we certainly are starting from a point that reasonably protects our interests, we are not trying to pull the wool over your eyes.  We are open to discussing all of the provisions of our template, and sometimes are even willing to work off of your “paper.”

If we are going to move forward with my client’s form, however, please do not ask us to change the choice of law provision to that of some other state.  We are based in Illinois, and we paid good money for our Illinois counsel to think through and draft our template.  It was written in consideration of how Illinois courts might interpret the many provisions and we don’t know, offhand, what your state’s courts might say differently, if at all.  We would rather not incur the additional pre-contract cost of researching that exhaustively.  And while it may seem interesting to you to suggest then, that we agree to choose the laws of some random third state, we don’t know that state’s laws any better and venture to guess that you don’t either.  We should not be fighting for a contract that neither one of us knows how it may be interpreted.  Better yet, let’s just make sure our contract is simple and clear and does not require judicial interpretation at all.

As for the judicial forum selection clause, we chose a forum in our home state on purpose.  You are contracting with an Illinois entity for services that will be performed or goods that will be sold from our location in Illinois.  If you have good reason to refuse to agree to have any lawsuits between us resolved here exclusively, we might entertain a provision that requires you to sue us in Illinois or us to sue you in your home state’s courts.  That would give both of us an incentive not to sue at all, which is just fine with us.  But again, let’s not choose some random third forum just because you think we’re up to something here; we’re not.  Sometimes things are as even as we can get them.

We truly do look forward to working with you.  Hope this helps you understand our thinking a little bit better so we can avoid spinning too many lawyer cycles on this topic.

Best regards,

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