For New Jersey businesses, out-of-state customers raise the question of where to sue for non-payment. This article will discuss what factors you should consider, and how to make sure the choice is yours.
Where To Sue For Non-Payment — Practical Considerations
If you had to sue for non-payment, normally you’d want to do so in your own state. Suing locally is more convenient for you, is less convenient for the out-of-state customer, and makes taking a default judgment more likely.
However, a New Jersey judgment only lets you seize assets in-state, so you’d want to know where the customer banks. If its bank has New Jersey branches, you can enforce your judgment and the decision to sue here is easy.
If there are no in-state assets, you’d either have to sue in the customer’s own state or get a judgment here and register it there (under the Constitution, you can take a judgment in one state and enforce it in another). In general, you’re better off taking the judgment in New Jersey, since suing in the customer’s state invites a contested suit that’s easier for the defendant.
Where To Sue For Non-Payment — The Need For A Forum Clause
A forum clause is a contractual provision agreeing to pursue any claims in a particular jurisdiction. Whether or not you choose to sue in New Jersey, you always want the option and should include a New Jersey forum clause in your contracts. You could still sue in the customer’s state if you preferred, since the customer isn’t likely to enforce the provision – but if the customer sued you for whatever reason, you wouldn’t want to get dragged there as a defendant.
For more information on where to sue for non-payment, or if you’d like to discuss a specific collection issue, call me at 856-667-1669 or contact me here.
This material is for informational purposes only and should not be construed as legal advice. No person should rely on this information without seeking the advice of an attorney.