A common clause in most contracts is the jurisdiction clause in which the parties to a contract agree at the outset of their contractual relationship which courts are to have legal authority (‘jurisdiction’) to hear disputes arising from that contract.

On June 1, 2016, AAR will release a revised Residential Lease Agreement (Lease). The revision to the Lease consists of the addition of a jurisdictional provision which is currently incorporated in other AAR forms. The provision may be found at line 235 and reads as follows:

Arizona Law: This Agreement shall be governed by Arizona law and jurisdiction is exclusively conferred on the State of Arizona.

The reason for the addition of this provision is to promote consistency and ensure that: (i) the Lease is governed by Arizona law; and (ii) litigation can be brought only in a court located within the State of Arizona.