In the world of business, matters of law are of utmost importance. Knowing the basics of the law can help business owners and professionals ensure their transactions are above board and legally sound. One term that often comes up in the context of business law is “jurisdiction”—but what does this term actually mean?
What Is Jurisdiction?
In the most basic terms, jurisdiction refers to the authority of a court to hear certain types of cases. Jurisdiction is typically limited by geographical area, by subject matter, and by the nature of the remedy sought by the plaintiff. In the United States, the geographical limitation usually corresponds to the state or federal government. For example, if a business owner is sued by a customer in a state court, it is because the court has jurisdiction over matters of contract law for events that occurred in the state which the court has territorial authority over.
When Does a Court Have Jurisdiction?
A court can only exercise its jurisdiction over matters of buy-sell agreements, breaches of contract, or other civil matters when certain jurisdictional facts are present. For example, if a California-based business owner enters into an agreement with a person who lives in New York, the California courts might not have jurisdiction over a suit brought regarding that agreement, unless the California court had jurisdiction over other related matters.
Examples of Jurisdiction
For example, in the case of a contract dispute between two business owners, the court that each business owner resides in may not have jurisdiction to decide the case. However, the court that the contract was signed in or the court where the transaction occurred may have jurisdiction over the dispute. In matters of employment law, the court in the state where the employee resides or the employer’s principal place of business may have jurisdiction over the case.
Jurisdiction can also come into play in matters concerning state or federal regulations. A state court may have jurisdiction over a case regarding a violated federal regulation, by virtue of the fact that the case relates to the commerce clause, or if the federal panel lacks jurisdiction.
Conclusion
At its most basic level, jurisdiction is the authority of a court to hear certain types of cases. This authority is confined to geographical area, subject matter and the relief sought by the plaintiff. By understanding when and how jurisdiction works, business professionals can better navigate the world of business Law.