A key aspect of state and federal government is “sovereign immunity”—or immunity from unconsented lawsuit. The same goes for tribal government. This is an ancient legal concept arising from the idea that the monarch can do no wrong, and therefore cannot be sued in his or her own courts—unless the sovereign consents.
In order to encourage normal business transactions, and provide contractors with a means of resolving disputes, the federal government has a “standing” limited waiver on the books, the Tucker Act, at 28 U.S.C. Section 1491. This allows suits under contracts to which the federal government is a party. The same goes for many states, including Minnesota—see, for example, Minnesota Statute Section 3.751, Contract Claims, Subdivision 1, Waiver of Immunity.
Tribes usually do not have blanket, limited-waiver rules like these on the books. And each tribe has its own laws. So how to ensure an enforceable dispute-resolution clause in a tribal contract? The answer is twofold: (1) careful negotiation of the dispute-resolution clause; and (2) a limited waiver of tribal sovereign immunity in the contract itself. Tribal law often also requires contract approval via written resolution of the tribal council or other governing body. Especially on larger deals, this process can take time. The dispute-resolution mechanism itself might require both compromise and creativity. Both tribes and their vendors need experienced legal counsel to navigate these issues and to ensure contracts are both clear and enforceable.