The key difference lies in the fundamental question each jurisdiction defect addresses: territorial jurisdiction asks "Does this specific court have geographic authority over the parties or events in this case?" while subject matter jurisdiction asks "Does this type of court have legal authority to hear this category of dispute?" A lack of territorial jurisdiction means you've chosen the wrong location within a judicial system (e.g., suing a California resident in New York for a local contract breach), whereas a lack of subject matter jurisdiction means you've chosen the wrong type of court entirely (e.g., filing a federal copyright claim in a small claims court). Crucially, while parties can consent to or waive objections to territorial jurisdiction, subject matter jurisdiction cannot be created by agreement and can be raised by the court or any party at any time—making it fatal to a case even if initially overlooked.****
