1. What Determines Where a Business Dispute Can Be Heard?
Contract terms can influence where a dispute proceeds, but they cannot give a court authority that the law withholds. Governing-law, forum-selection, and arbitration clauses serve different purposes. Their wording may affect the available proceedings before a lawsuit begins.
Governing Law, Forum Selection, and Arbitration
A governing-law clause identifies the substantive law governing a dispute. A forum-selection clause identifies where the parties agree to litigate. Choosing New York law does not automatically establish jurisdiction in its courts.
General Obligations Law (GOL) § 5-1401 permits parties to qualifying transactions involving at least $250,000 to select New York law without another reasonable connection to the state, subject to statutory exceptions.
GOL § 5-1402 separately permits actions against certain foreign corporations and nonresidents involving transactions of at least $1 million when the agreement selects New York law under § 5-1401 and contains the required consent to jurisdiction.
Neither provision independently establishes federal jurisdiction.
An arbitration clause may require covered disputes to proceed before an arbitrator rather than a court. Its scope determines which claims must follow that procedure.
Notice and Opportunity to Cure
Some agreements require written notice of a breach, a specified delivery method, or an opportunity to correct nonperformance before litigation.
Failure to satisfy an enforceable contractual prerequisite may affect a breach of contract lawsuit. Businesses should examine amendments and correspondence to determine whether the required notice was delivered and any applicable cure period expired.
2. Which State or Federal Court Can Hear the Case?
The claim, requested remedy, and jurisdictional requirements determine which court may hear a dispute. Jurisdiction concerns a court's legal authority, while venue identifies the proper location. The Commercial Division is a specialized part of Supreme Court, not a separate court for every business claim.
Supreme Court and Civil Court Jurisdiction
New York City Civil Court generally handles money claims within its $50,000 jurisdictional limit. Supreme Court has broad original civil jurisdiction and can hear larger commercial disputes and claims seeking relief beyond Civil Court's authority.
Under CPLR § 503, venue generally depends on a party's residence or where a substantial part of the underlying events occurred, subject to applicable exceptions and enforceable contractual provisions.
Commercial Division Monetary Thresholds
Uniform Rule 202.70 generally requires a qualifying commercial dispute and satisfaction of the applicable monetary threshold unless a specified exception applies.
| County | General Monetary Threshold |
|---|---|
| New York | $500,000 |
| Kings | $150,000 |
| Queens | $100,000 |
| Bronx | $75,000 |
New York
- General Monetary Threshold$500,000
Kings
- General Monetary Threshold$150,000
Queens
- General Monetary Threshold$100,000
Bronx
- General Monetary Threshold$75,000
These thresholds govern Commercial Division assignment, not Supreme Court's general subject-matter jurisdiction.
The calculation excludes claimed punitive damages, interest, costs, disbursements, and attorney fees.
For equitable or declaratory relief, the court generally measures the value of the right, benefit, or injury at issue. Under the rules effective March 31, 2025, the relevant value is the greatest of the intended benefit, right being protected, or injury being avoided.
Seeking an injunction or declaratory judgment alone does not eliminate the monetary requirement.
Exceptions to Commercial Division Monetary Requirements
Certain proceedings are exempt from the monetary threshold under Uniform Rule 202.70(b), including:
- Shareholder derivative actions
- Commercial class actions
- Dissolution proceedings involving corporations, partnerships, LLCs, LLPs, and joint ventures
- Applications under CPLR Article 75 to stay or compel arbitration, affirm or disaffirm arbitration awards, or seek related injunctive relief involving eligible commercial matters, where the arbitration agreement provides for arbitration outside the United States
Other arbitration-related proceedings generally remain subject to the applicable monetary threshold.
The Division handles qualifying complex commercial litigation involving business contracts, fiduciary duties, commercial fraud, and other eligible business transactions.
Residential real estate disputes, including landlord-tenant matters, and commercial real estate disputes involving only the payment of rent are excluded from the Commercial Division, regardless of the amount claimed.
Federal Subject-Matter Jurisdiction
Federal courts require an independent statutory basis. Under 28 U.S.C. § 1331, federal-question jurisdiction generally covers claims arising under federal law. Under § 1332, diversity jurisdiction generally requires complete diversity of citizenship and an amount in controversy exceeding $75,000, excluding interest and costs.
A corporation generally has citizenship where it was incorporated and where it maintains its principal place of business. An LLC's citizenship depends on its members.
The Southern and Eastern Districts of New York hear qualifying federal cases within their respective geographic jurisdictions. Contractual consent to federal court cannot create subject-matter jurisdiction.
3. How Does Commercial Division Assignment Work?
Starting a lawsuit and obtaining Commercial Division assignment are separate steps. A business must first comply with the court's commencement and service requirements, then request specialized assignment under Uniform Rule 202.70.
Filing through NYSCEF
New York County Supreme Court generally requires electronic commencement of ordinary civil actions through the New York State Courts Electronic Filing System (NYSCEF), subject to applicable exceptions.
The plaintiff typically files a summons and complaint or summons with notice, pays the filing fee, and receives an index number. Electronic filing does not replace legally required service on the defendant.
County-specific procedures may differ. Businesses should confirm the applicable rules before making a civil complaint filing.
RJI Requirements and the 90-Day Deadline
Under Uniform Rule 202.70(d), a party generally must seek Commercial Division assignment within 90 days after service of the complaint.
The request requires a Request for Judicial Intervention (RJI) and completed Commercial Division RJI Addendum identifying the basis for eligibility.
Failure to meet the deadline ordinarily prevents assignment through the usual procedure.
Rule 202.70(e) provides limited transfer procedures. If a timely RJI resulted in assignment to a noncommercial part because the filer omitted the commercial designation, another party may seek transfer by letter application within 10 days after receiving the RJI.
A party may also request transfer after the ordinary deadlines upon showing good cause for the delay. The Administrative Judge determines whether the transfer requirements are satisfied.
4. What Should Management Check before Suing?
Before filing, a business should identify the elements of its claim, confirm the applicable limitations period, and preserve records supporting the alleged breach or other misconduct. A favorable forum cannot replace missing evidence or revive an expired claim.
Contract Claims and Filing Deadlines
An ordinary breach of contract claim generally requires an enforceable agreement, performance or excuse for nonperformance, breach, and resulting damages.
Under CPLR § 213(2), ordinary contract claims generally have a six-year limitations period.
UCC § 2-725 generally establishes a four-year period for covered sales-of-goods disputes. The original agreement may shorten that period to no less than one year.
The applicable deadline depends on the cause of action, accrual date, and relevant exceptions. A demand letter does not ordinarily suspend the limitations period merely because settlement discussions are underway.
Transaction Records and Evidence Preservation
Contracts, amendments, invoices, payment records, delivery confirmations, and relevant correspondence can establish what each party agreed to and whether performance occurred.
A chronological record helps distinguish an actual breach from competing interpretations of contractual obligations. Management should also identify who controls relevant documents and whether communications contain privileged legal advice.
Once litigation is reasonably anticipated, applicable evidence preservation duties may require suspending routine deletion of relevant electronic records.
Missing or inconsistent documentation may affect both the available claims and the decision to pursue settlement.
5. Frequently Asked Questions
Can an LLC or Corporation Sue Without an Attorney?
An LLC or corporation generally must appear through an attorney in Supreme Court. A nonlawyer owner, member, or officer cannot ordinarily conduct the litigation on the entity's behalf.
CPLR § 321(a) establishes the general representation requirement for corporations. Limited exceptions exist in qualifying Small Claims and Commercial Claims proceedings, where authorized representatives may appear under applicable court rules.
Can a Business Seal a Confidential Contract Filed in Court? A contractual confidentiality provision does not automatically make a filed document confidential.
Under 22 NYCRR § 216.1, sealing generally requires a written judicial finding of good cause after considering the public interest in access to court records.
Unfiled discovery materials may instead be subject to protective orders under CPLR § 3103. Businesses should distinguish restrictions on exchanging documents during discovery from orders limiting public access to court filings.
23 Oct, 2026
