How should I choose an arbitration venue and governing law for an out-of-state client?

What is the most common setup?

A common approach is to use your home state for both governing law and arbitration venue. This keeps things simple and predictable.

If the client pushes back, another standard option is to split the difference—such as using one state's law and a neutral or flexible arbitration location, or letting the arbitration provider decide the venue if needed.

How do you keep it fair and enforceable?

The key is reasonableness. Courts are more likely to respect clauses that are clear and not overly one-sided.

Choosing a state tied to the work, the parties, or the contract helps support enforceability. Using a known arbitration provider (like AAA or JAMS) and clearly stating the rules also adds clarity. The chosen state or venue should have a reasonable relationship to the parties or transaction.

What to do next...

1. Decide if your state works for both law and venue.
2. Consider a neutral or flexible option if needed.
3. Make sure the clause is clear and specific.
4. Align arbitration terms with your overall contract structure.

What to consider in your specific situation

While common practices help, your best setup depends on your business and client relationship.

• Where you and your client are located.
• The cost and burden of travel or hearings.
• The value and risk level of the contract.
• The client's willingness to negotiate terms.
• The connection between the contract and the chosen state.
• Whether you prefer fixed or flexible arbitration terms.

A balanced clause can reduce disputes, control costs, and keep deals moving smoothly. Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.