Jury Waiver and Judicial Reference Clauses in California Business Contracts
Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).
A jury waiver clause signed before any dispute exists is not enforceable in a California state court. The California Supreme Court held in 2005 that a civil jury can be waived only by the methods listed in Code of Civil Procedure section 631, and a contract is not one of them. Parties who want a decision without a jury can instead agree to judicial reference under section 638, or to arbitration. Kolmogorov Law, P.C., a business litigation firm in Irvine, represents companies in disputes over these clauses.
Call (909) 235-6116 or contact us online to discuss a contract with a jury waiver or a reference clause.
Why a predispute jury waiver fails in California courts
A jury waiver clause is a sentence in a contract in which each side gives up the right to a jury in any lawsuit over the agreement.
The California Constitution calls trial by jury an inviolate right. In a civil case a jury may be waived by the consent of the parties expressed as prescribed by statute. (Cal. Const., art. I, § 16.) The statute is section 631. It says a jury may be waived in a civil case only in the ways it lists. Those ways are failing to appear at trial, consenting in a writing filed with the court or orally in open court, failing to announce that a jury is required, and failing to pay the required fees on time. (Code Civ. Proc., § 631, subds. (a), (f).)
A contract signed before the dispute is not on the list. On that basis the California Supreme Court held predispute jury waivers unenforceable, and said any change was for the Legislature. (Grafton Partners v. Superior Court (2005) 36 Cal.4th 944.) Section 631 still contains no contract method.
In a California court, a company that put the waiver in its own form cannot enforce it, and a company that signed someone else's form is not held to it.
Judicial reference: the alternative the statute allows
The same decision pointed to two routes the Legislature has approved in advance: arbitration and judicial reference.
Under section 638, a court may appoint a referee on the motion of a party to a written contract or lease that provides that any controversy arising from it shall be heard by a referee. The court must first find that a reference agreement exists. The referee may hear and determine any or all of the issues, of fact or of law, and report a statement of decision. (Code Civ. Proc., § 638.)
The lawsuit is still filed in superior court, and the referee tries it without a jury.
How reference differs from arbitration and from a court trial
The differences show up at the end of the case.
- The decision. In a consensual general reference, the referee's decision stands as the decision of the court, and judgment is entered as if the court had tried the action. (Code Civ. Proc., § 644, subd. (a).)
- Review. The referee's decision may be excepted to and reviewed in the same manner as a decision made by the court. (Code Civ. Proc., § 645.) An arbitration award is reviewed on far narrower grounds, described on our page about confirming or vacating an award.
- Selection. The court appoints the referee the parties agree on. If they cannot agree, each party submits up to three nominees and the court chooses. (Code Civ. Proc., § 640, subds. (a), (b).)
- Cost. The referee's fees are paid as the parties agreed. (Code Civ. Proc., § 645.1, subd. (a).)
- Timing. A referee appointed under section 638 reports as the parties agreed and the court approved. The general rule for referees is a written statement of decision within 20 days after the hearing ends and the matter is submitted, unless the court directs otherwise. (Code Civ. Proc., § 643, subds. (a), (b).)
When a court may decline to appoint a referee
Section 638 says a referee "may" be appointed. The California Supreme Court has read that word to give the trial court discretion to refuse, even where the reference agreement is valid. In that case only some of the parties had signed reference agreements. The trial court declined to split the dispute, citing the risk of inconsistent rulings and the duplication of effort, and the Supreme Court upheld that choice.
A reference clause may therefore be on firmer ground in a two-party dispute than where non-signers are in the case.
Federal court and out-of-state forums
The rule follows California law into federal court. The Ninth Circuit has held that a federal court sitting in diversity must apply California's rule to a contract governed by California law. The waiver in that case was not enforced.
A different clause can produce a different result. In July 2025 the California Supreme Court held that a forum selection clause is not unenforceable simply because the chosen forum does not give civil litigants the same jury trial right. A forum clause reflects where a dispute will be litigated, and a jury waiver reflects how. (EpicentRx, Inc. v. Superior Court (2025) 18 Cal.5th 58, 67.) The court did not decide whether the clause before it could be refused on other grounds. A contract that sends disputes to another state's or country's courts may therefore end in a trial without a jury there. Our pages on forum selection clauses and choice of law clauses cover those terms.
How these clauses come up in a lawsuit
A lender's loan agreement waives a jury and adds that, if the waiver is unenforceable, any dispute will be decided by a referee under section 638. The borrower sues in superior court and demands a jury. The lender moves to appoint a referee, and the fight is over the fallback sentence.
A software vendor's form has a jury waiver and nothing else. The waiver is not enforced, and the case is tried to a jury if either side properly asks for one.
If your contract has one of these clauses
If you want a jury, do not rely on the clause being void. Demand the jury and pay the fee on time, because missing that step is itself a statutory waiver. Our page on jury and bench trials explains the deadlines.
If you want the referee, move early and attach the signed agreement. Be ready to show that every party to the lawsuit is bound by the clause, or to explain why a partial reference would not create duplicate proceedings.
Our guide to civil trials in California describes what a jury trial involves.
What to bring to the first meeting
- The contract, including the dispute resolution, governing law, and forum clauses.
- Any related agreements, such as guaranties, that have different clauses.
- The complaint and any jury demand or motion already filed.
- The case management schedule, if a lawsuit is pending.
Frequently asked questions
Our contract says we waive a jury trial. Is that enforceable in a California court?
No, not if the waiver was signed before the dispute arose. The California Supreme Court held in 2005 that a civil jury may be waived only by the methods in Code of Civil Procedure section 631. An advance contract clause is not among them. Check whether the contract also has a judicial reference or arbitration clause, because those can be enforced.
The lease we signed sends all disputes to a referee instead of a jury. Do we have to accept that?
Possibly. California Code of Civil Procedure section 638 lets a court appoint a referee where a written contract or lease provides that controversies will be heard by one. The court keeps discretion to refuse, for example where other parties in the lawsuit never agreed to a referee and the dispute would be split.
What is judicial reference in California?
It is a California procedure in which the superior court appoints a referee, by agreement of the parties, to hear and decide some or all of the issues in a lawsuit. In a general reference by consent, the referee's decision stands as the decision of the court. There is no jury, and the parties pay the referee.
Is judicial reference the same as arbitration?
No. Both replace a jury with a private decision maker, but a California reference stays inside the court case. The referee's decision becomes the court's judgment and can be reviewed the way a judge's decision can. An arbitration award is ordinarily final on questions of fact and law and can be set aside only on limited statutory grounds.
Can a jury waiver be enforced in federal court in California?
Usually not when California law governs the contract. The Ninth Circuit has held that federal courts sitting in diversity apply California's rule against predispute jury waivers to contracts governed by California law. The answer may differ if the contract is governed by another state's law or the case is in another state.
Talk to a California business litigation attorney
If a jury waiver or reference clause will shape how your dispute is decided, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located in Irvine, California. Related reading: our breach of contract practice page and our page on arbitration and litigation.
This page provides general information about California and federal law and is not legal advice. Outcomes depend on the contract, the parties in the case, and the court.