United States: The Interpretation and Effect of Permissive Forum Selection Clauses
- 285 Downloads
A forum selection clause is a form of contractual waiver. By this device, a contract party waives its rights to raise jurisdictional or venue objections if a lawsuit is initiated against it in the chosen court. (If the forum selection is exclusive, then that party also promises not to initiate litigation anywhere other than in the chosen forum.) The use of such a clause in a particular case may therefore raise a set of questions under contract law. Is the waiver valid? Was it procured by fraud, duress, or other unconscionable means? What is its scope? And so on.
Unlike most contractual waivers, however, a forum selection clause affects not only the private rights and obligations of the parties, but something of more public concern: the jurisdiction of a court to resolve a dispute. The enforcement of such a clause therefore raises an additional set of questions under procedural law. For instance, if the parties designate a court in a forum that is otherwise unconnected to the dispute, must (or should) that court hear a case initiated there? If one of the parties initiates litigation in a non-designated forum that is connected to the dispute, must (or should) that court decline to hear the case?
Under US law, the bottom line is straightforward: almost always, in consumer as well as commercial contracts, forum selection clauses will be enforced. Navigating the array of substantive, procedural, and conflicts rules whose interplay yields that result, though, is far less straightforward. That is the task of this report. Section 2 provides a brief background on the general attitude toward forum selection clauses. Section 3 surveys current state law on their use, in consumer as well as commercial contracts. Section 4 addresses the interpretation of forum selection clauses as either permissive or exclusive. Section 5 analyzes the effect of permissive clauses in state and federal courts. Finally, Sect. 6 turns to choice of law problems, particularly as they arise in the course of litigation in federal courts.
- Born GB, Rutledge PR (2011) International Civil Litigation in United States Courts. Wolters Kluwer, New YorkGoogle Scholar
- Casad RC, Richman WM, Cox SE (2014) Jurisdiction in civil actions. LexisNexis, New YorkGoogle Scholar
- Clermont KM (2015) Governing law on forum-selection agreements. Hastings Law J 66:643–674Google Scholar
- Coyle JF (2019) Interpreting forum selection clauses. Iowa Law Rev 104:1791–1855Google Scholar
- Effron R (2015) Atlantic Marine and the future of forum non conveniens. Hastings Law J 66:693–718Google Scholar
- Gruson M (1982) Forum selection clauses in International and Interstate Commercial Agreements. Univ Illinois Law Rev 1982:133–206Google Scholar
- Heiser WW (1993a) Forum selection clauses in state courts: limitations on enforcement after Stewart and Carnival Cruise. Fla Law Rev 45:361–401Google Scholar
- Heiser WW (1993b) Forum selection clauses in federal courts: limitations on enforcement after Stewart and Carnival Cruise. Fla Law Rev 45:553–608Google Scholar
- Heiser WW (2010) The Hague Convention on Choice of Court Agreements: the impact on forum non conveniens, transfer of venue, removal, and recognition of judgments in United States Courts. Univ Pa J Int Law 31:1013–1050Google Scholar
- Lenhoff A (1961) The parties’ choice of a forum: “Prorogation Agreements”. Rutgers Law Rev 15:414–490Google Scholar
- Lord RA (2002–2018) Williston on contracts. West Group, New YorkGoogle Scholar
- Mullenix LS (2015) Gaming the system: protecting consumers from unconscionable contractual forum-selection and arbitration clauses. Hastings Law J 66:719–760Google Scholar
- Sachs SE (2014) The Forum Selection Defense. Duke J Constitutional Law Public Policy 10:1–44Google Scholar
- Symeonides SC (2018) What law governs forum selection clauses? La Law Rev 78:1119–1161Google Scholar
- Yackee JW (2004) Choice of law considerations in the validity & enforcement of International Forum Selection Agreements: whose law applies? UCLA J Int Law Foreign Aff 9:43–96Google Scholar