B2B agreement on jurisdiction of a particular court – can it be included in the GT&C?

14. 6. 2018

In court proceedings dealing with matters relating to relations between entrepreneurs arising from their business activities, the law allows entrepreneurs to agree in writing on which court will have jurisdiction in the matter, a so-called prorogation agreement. An exception to this authorization is only a precisely determined list of proceedings for which the law stipulates exclusive local jurisdiction, which cannot be departed from even by the parties’ agreement.

The motivation to enter into a prorogation agreement is usually cost savings. Particularly if an entrepreneur in its business activities enters into agreements or provides services to several different entities, it is more cost-effective to be involved in a lawsuit at its “home” court rather than litigate throughout the country.

However, such an agreement must be in writing and may not be concluded in the business-consumer (B2C) relationship. The parties’ arrangement is usually the subject of a specific agreement from which the future dispute will arise. Nevertheless, the assumption of the written nature of the agreement, if included in the General Terms and Conditions (“GT&C”), was also dealt with by the Supreme Court of the Czech Republic in its decision. The Court concluded that the prorogation agreement may also be determined by a reference to the GT&CGT&C, if annexed in written form to the draft agreement or known to the parties. They are also known to the parties if the written copy of the agreement contains a reference to the GT&C although they are available online. A necessary condition in such a case is that the other party confirms by its signature that it has read and agrees with the GT&C available on the website!

It can be concluded that GT&C can also be published on websites, thereby being included in the contractual relationship between the parties, which is especially practical for entities trading through the Internet. However, this fact is also essential because it allows entrepreneurs to use other arrangements, i.e. not only an agreement to determine the local jurisdiction of the court.

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