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Legalities and Enforceability of International Joint Ventures and Non Disclosure Agreements

by Audrey Harvey
7 replies
Good morning Warriors :-)

I'm just about to sign a non disclosure agreement before working on a project for a website owner.

One clause states: "This agreement will be governed by the laws of the jurisdiction in which the disclosing party is located and disputes shall be submitted to the courts of that jurisdiction".

The website owner is in the US (not sure which state, doesn't really matter), and I'm in Australia.

Let me just clarify that I've got no intention of pinching anyone's idea, I've got enough of my own projects to work on, and my off line life is pretty hectic. The website owner is treating me very fairly indeed and it's in my best interests that the site succeed. I have a bit of an idea as to what the site is about, and starting a similar site just doesn't interest me. Apart from that, I'm too honest.

I know this forum isn't a source of legal advice, but someone may have an idea. What sort of clout could a US court have on an Aussie resident? The clause just made me wonder if in fact someone living overseas could be taken to court in the US. Perhaps if there's enough money at stake, it could be worth the effort.

Have a good weekend

Audrey
#agreements #disclosure
  • Profile picture of the author Adaptive
    Audrey, with the increased international collaboration the Internet makes possible these days, this is a good question and I hope we get some discussion about it. Unfortunately your thread title suggests that the question is about how NDA's work, rather than the legalities of international joint ventures. I'm not a lawyer, but anyway, it looks like you probably won't be extradited unless for a criminal case that would have significant penalties in both countries. What I don't know is what would happen if the American party won an American civil contract lawsuit against you in an American court: could that create a judgment that could be enforced against you in Australia? And would the answer be a matter of both Australian federal and state law? It would be interesting to get an informed answer to that question.

    Regards,
    Allen
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  • Profile picture of the author Audrey Harvey
    Thanks Allen, I've changed the title of the thread to reflect your suggestion.
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  • Profile picture of the author Adaptive
    Audrey, good luck finding the answers to these questions. I'm curious myself!

    Regards,
    Allen
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  • Profile picture of the author Popstar
    Hi Audrey,

    That's a venue clause. I always put those in my agreements, too. That way, if there's legal action to be taken, it goes to court in my city and not somewhere else where I might have to travel a far distance.

    Can they take you to court?

    Sure.

    Can they collect on a judgment against you?

    You'd need to get legal advice on that. But practically speaking, unless there's a large sum of money involved, it probably wouldn't be worth anyone's time to try to collect on a judgment in another country.

    It's hard enough to collect on a judgment in your own city in the US. As the saying goes, a judgment usually isn't worth the paper it's written on.

    But it's hard to say in advance whether you'll ever be involved in a dispute that's worth a lot of money.

    So it's much better to discuss all the details of your contract upfront and minimize the potential for conflict. It's also helpful to discuss how you'll settle any differences should they arise.

    If I were you, the one concern I would have is this... what if they disclose information or an idea to you in an area where you're already working? Is there any kind of non-compete that goes with this and if so, how extensive is it?

    You don't want to be prohibited from working on any of your current projects.

    If you're not concerned about that, then it doesn't sound like you should have a problem. But you really should consult an attorney.

    An Internet marketing forum just isn't the place to go for legal advice.

    Good luck,
    Debbie
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    • Profile picture of the author Thomas
      Originally Posted by Audrey Harvey View Post

      What sort of clout could a US court have on an Aussie resident? The clause just made me wonder if in fact someone living overseas could be taken to court in the US.
      Originally Posted by Adaptive View Post

      What I don't know is what would happen if the American party won an American civil contract lawsuit against you in an American court: could that create a judgment that could be enforced against you in Australia? And would the answer be a matter of both Australian federal and state law?
      Originally Posted by Popstar View Post

      That's a venue clause. I always put those in my agreements, too. That way, if there's legal action to be taken, it goes to court in my city and not somewhere else where I might have to travel a far distance.

      Can they take you to court?

      Sure.

      Can they collect on a judgment against you?
      The 'short' answer to all this is: Most Western countries (incl. the US and Australia) have agreed to mutual recognition of judgements but there's a gigantic "but...": Any judgement made against you in the U.S. would still have to be "domesticated" in Australia in order to be enforced there, and this is contingent on a whole range of factors, not least of which will be compatability with Australian law. Other factors will be considered too, including the question of whether the foreign court really had jurisdiction over you (again, from the point-of-view of Australian - not American - law) and if the foreign court where the judgement was made was an inconvenient forum for you (and having a 'venue clause' won't automatically make this true).

      Tommy.
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      • Profile picture of the author klublok
        That clause is pretty standard in most agreements - as a poster has already said. In fact it is usually put in by the person giving out the contract because they usually want the "home ground advantage". It is very common in international agreements, as obviously parties come from different legal jurisdictions.

        The clause states that the entire contract is governed by the disclosing party's jurisdiction. This means that you will be governed by US disclosing laws (assuming privacy and general commerical law as it stands in America) as opposed to Australian disclosing laws.

        Also, if you have some disputes you will most likely need to go to the US courts to get relief. If someone is suing you, then they are most likely to commence the action in the US (in their home state). If you want to defend, then you will need to defend over there (unless you apply to the courts to bring the action here - but you will need VERY compelling reasons for that to happen - like you are close to medical support that cannot be found in the US etc).

        Then again if it is not worth defending then you just wouldn't show up. They will get default judgement, but might find it hard to actually enforce the decision...

        But I wouldn't be too worried if it is a standard NDA and you are not going to do anything untoward. Most of the important obligations imposed on you should be in the actual NDA anyway - rather than relying on a standard boilerplate clause.

        Anyway, happy to have a look at it for you - just PM me.
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  • Profile picture of the author Audrey Harvey
    Thanks Klublok, I don't have a problem with the NDA - it just says "don't tell anyone anything about my idea for 5 years", and doesn't restrict my own activities in any way.

    I'm not planning on doing anything untoward, just was interested in what could be realistically done internationally.

    I see you're in Brisbane too - plenty of rain around this week!

    Cheers

    Audrey
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