Client Alert

California Court of Appeal Rules that Contractual PreDispute Waivers of Jury Trials are Not Enforceable

March 01, 2004

Carl R. Sanchez and Teri E. OBrien

On February 6, 2004, the California Court of Appeal ruled in Grafton Partners LP v. Superior Court that contractual predispute jury waiver provisions are unenforceable in civil actions under California law. A predispute jury waiver provision, quite common in commercial contracts, essentially waives a party’s right to a jury trial if a dispute arises under the contract and relegates disposition of the dispute to a court trial. The Grafton Court’s ruling, which set aside a Superior Court ruling enforcing a jury waiver provision, effectively invalidates existing predispute jury waivers in commercial contracts governed by California law, even if such contracts were entered into prior to February 6, 2004. Perhaps even more troubling is the proposition that parties to commercial transactions are no longer able to guarantee that disputes that may arise under a contract will be heard and decided by a jury of their peers.

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