For UK companies entering into agreements with U.S. counterparties, a critical question often arises: if something goes wrong, can the contract be enforced in the United States? The answer is yes—provided the contract is drafted with enforceability in mind, and the right legal strategy is in place from the outset.
Understanding Jurisdiction Clauses
The starting point is the jurisdiction clause. This provision determines which country’s courts have the authority to hear disputes. If your contract is governed by U.S. law and names a specific U.S. state court or federal court as the venue, enforcement proceedings will typically need to take place there. A US lawyer will ensure that the clause is not only valid but also practical—choosing a jurisdiction with strong commercial law, efficient procedures, and neutrality between the parties.
Without careful drafting, a jurisdiction clause can be challenged, adding delays and costs. Abrams Law, as a firm with US Attorneys licensed to practise in the United States, helps UK companies structure agreements that withstand scrutiny in both UK and U.S. courts.
The Role of Cross-Border Deal Structuring
Enforceability is not just a dispute-resolution issue; it begins with how the deal is structured. Our mergers and acquisitions advisory team ensures that contracts involving U.S. parties are aligned with your business objectives, risk tolerance, and operational realities. This includes:
- Selecting governing law and venue that support swift resolution.
- Building in dispute resolution mechanisms, such as arbitration clauses, where appropriate.
- Ensuring payment terms, warranties, and indemnities are enforceable under U.S. law.
By embedding enforceability considerations at the contract stage, we reduce the risk of future litigation and increase the likelihood of quick, favourable outcomes.
Strengthening Your Position Before a Dispute Arises
A corporate governance lawyer plays a vital role in preparing your company for potential disputes. Proper internal governance and documentation practices can make all the difference in enforcement proceedings. This includes:
- Maintaining accurate board minutes and resolutions that approve the contract.
- Keeping detailed records of negotiations, amendments, and performance.
- Ensuring compliance with both UK corporate governance codes and U.S. statutory requirements.
When a dispute reaches court, this internal evidence demonstrates that your company acted in good faith and in compliance with governance standards, strengthening your case.
Enforcing a U.S. Judgment in the UK
If you succeed in a U.S. court, the next step may be to enforce that judgment in the UK—especially if the counterparty’s assets are here. While the UK and U.S. do not have a reciprocal enforcement treaty, UK courts will generally recognise and enforce U.S. judgments if certain conditions are met, including proper jurisdiction, finality of judgment, and no conflict with UK public policy.
Our dual-qualified team navigates these cross-border enforcement steps, coordinating with local counsel where necessary to secure assets efficiently.
One Recent Case That We Worked On
The assets of two affiliated SAAS (Software as a Service) companies, one based in California and the other in London, were purchased by a Private Equity buyer. The Sellers were separately owned by a US entity and a UK limited company respectively.
Abrams Law worked on the sale of the business and assets of both companies and the transaction successfully completed to all parties’ satisfaction.
Prior to the purchase the parties operated on and were connected by a series of licences for the technology and the brand, with the UK company being the licensor and the US entity being the licensee.
Royalties were payable by the licensee under the licence, which was governed by UK law, following a lengthy negotiation on the jurisdiction clause in the contracts..
The UK Licensor calculated a significant amount of unpaid royalties which were payable by the Licensee leading up to the sale and instructed Abrams Law to recover the debt that had arisen from the US Licensee.
Abrams Law assessed the contracts and the calculations and advised the client that under the contract (UK Law-governed), there was a claim that could be issued in the UK courts for non-payment of royalties.
After some back and forth with the US Licensee – who disputed the claim and refused to make any further payments – Abrams Law was instructed by the UK licensor to proceed with a claim via the courts.
Abrams Law worked with UK solicitors, Gregory Abrams Davidson Solicitors and issued served proceedings on the US licensee (outside of jurisdiction), before obtaining a UK court judgment in the amount of the debt against the US licensee.
The judgment was then required to be enforced against the US licensee in the US State of California, which involved a new claim at court and service of the US court papers on the US licensee (who is the Judgment Debtor).
This particular Debtor proved difficult to serve the papers on, but eventually, the papers were served and a response was provided by the Debtor to the California court.
The case is currently ongoing.
Why Abrams Law?
- Dual-qualified expertise: London-based solicitors and US lawyers licensed to act in U.S. courts.
- Integrated advice: Combining mergers and acquisitions advisory with governance, compliance, and dispute resolution.
- Proactive protection: A corporate governance lawyer to ensure internal readiness for cross-border enforcement.
If your UK business has—or is negotiating—a U.S. contract, let us help ensure it is enforceable and strategically structured from day one. Contact Abrams Law at info@abrams.law or call us in the UK on +44 208 004 7016 or in the US +1 646 873 7573.