Which statement best reflects the constraint on third-party reach of a jurisdiction clause as illustrated by Leventis or related cases?

Prepare for the DIPR Jurisprudence Test. Utilize flashcards, multiple-choice questions, and comprehensive explanations to enhance your understanding and readiness for the exam.

The guiding idea is privity of contract: terms like a jurisdiction clause are created by and for the contracting parties and don’t automatically bind people who aren’t signatories. In Leventis and related cases, the court emphasizes that a forum or governing-law clause operates within the dispute between those who entered the agreement, and it does not reach out to third parties just because they have some connection to a signatory. Therefore, the basic rule is that a jurisdiction clause binds only the parties to whom the contract was concluded, unless there is explicit language or a separate mechanism (like consent, naming the third party, or a statutory provision) that extends the clause to others. The other options overstate or misstate how such clauses operate: they either try to bind non-signatories by default or require conditions that aren’t necessary if the clause isn’t intended to affect third parties.