Clifford Chance

Unilateral Option Clauses Survey 2024

Unilateral option clauses are a common feature in many transaction documents. These clauses grant one party the exclusive right to decide between arbitration or litigation as the forum to resolve a dispute.

This means a party can choose the forum for their dispute at the time the dispute arises, rather than at the time of negotiating the agreement. Parties should exercise care when considering whether to include unilateral option clauses in their agreements. Treatment of these clauses varies significantly between jurisdictions. The consequences of including unilateral option clauses in agreements that are connected with a jurisdiction that considers them to be invalid can be severe.

Clifford Chance has updated and expanded its 2021 Survey on the current effectiveness of unilateral option clauses across the world. The 2024 Survey now covers 120 jurisdictions.