Forum Selection Clauses Lawyers

Forum Selection Clauses: Are They Enforceable?

What is a Forum Selection Clause?

A forum selection clause in a contract is an agreement by both parties to adjudicate any disputes resulting from the contract, such as a breach of contract, in a specified forum.  Forum selection clauses are included in many commercial contracts and are extremely popular in electronic contracts.  There are two main types of forum selection clauses.  

1. Specify a particular court, in a particular jurisdiction -  For example, Federal District Court in the Middle District of Pennsylvania
2. Specify an alternative dispute resolution process - Examples include Arbitration or Mediation

Are Forum Selection Clauses Enforceable?

Generally, forum selection clauses are enforceable.  Supreme Court decisions have repeatedly upheld forum selection clauses so long as they are made in good faith and comply with standards of fundamental fairness.  Although forum selection clauses are commonly used in adhesion contracts to the benefit of the stronger party, they are enforceable when they are included for the convenience of that party, rather than for the sole purpose of discouraging lawsuits.

Additionally, arbitration clauses are presumed valid and enforceable under the Federal Arbitration Act.

When Are Forum Selection Clauses Not Valid?

In order for a forum selection clause to be found invalid and unenforceable, the party wishing to avoid it must meet the heavy burden of showing that its enforcement would be unreasonable, unfair, or unjust.  Evidence of this may include fraud, duress, or undue influence.  Additionally, some states may void the clause if it is found to be an unconscionable term.

Do I Need a Lawyer For My Forum Selection Clause Problem?

Contract law is very complicated.  Issues of forum, venue and jurisdiction are especially difficult.  In order to ensure that your rights are protected, you should contact a business attorney to help you determine the enforceability of your forum selection clause.  Your attorney will be able to help you get your case heard in the right court.