Connecticut Supreme Court Limits Right to Trial By Jury: Waive Goodbye to Juries
Thursday, April 14, 2016

The right to a trial by jury is considered a fundamental right in Connecticut.  However, our Supreme Court has held that this right is subject to certain limitations.  Indeed, the right to a jury may be specifically waived by parties to a contract.  L & R Realty v. Connecticut National Bank, 246 Conn. 1 (1998). 

Many banks already include jury waiver clauses in their loan documents. 

However, not all jury waiver clauses are created equal.

While our courts have held that jury waivers in pre-litigation contracts are “presumptively enforceable,” there are a number of factors a court will look at to determine the validity of a waiver when it is challenged.  A party seeking to avoid a waiver can argue that the waiver clause is hidden in the loan document.  Therefore, location of the waiver clause and the font and style used (e.g., bold or CAPS) will be particularly important.  A challenger can also argue that there was a substantial disparity in bargaining power between the parties or that they were unable to negotiate the terms of the contract.  These arguments against a waiver are sometimes bolstered when the party seeking to avoid the clause was not represented by counsel during negotiation or closing of the contract.

Jury trials in Connecticut State Courts are extremely expensive and lengthy.  Accordingly, banks should strongly consider including jury waiver clauses in loan agreements, promissory notes, guaranty agreement, security agreements, and other loan documents.  Many banks already take this step.  However, to be better prepared to defeat a challenge to the validity of the waiver, it may be beneficial to have an attorney review the clause and discuss some best-practices to keep in mind when negotiating documents containing jury waivers.

 

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