The Court Jester is a court item purchasable from the shop that is one of 4 that will boost food that is awarded when visiting court. The others are the Hunting Dogs, Professional Sculptor, and Metallurgist. As many find them worthless their actual effect, be it for the owner or the visitor, is unknown. You will see the court jester in someone's court when you visit them.
A Court Jester was given as a gift to the player in the Crush the Barbarians tournament who placed 1,000th; the last place eligible for any kind of prize. Making it a gag prize of sorts, showing the programmers knowledge of it's uselessness.