39:
785:. The majority of professionally drafted contracts will address both issues, and contain clauses specifying both the forum and the law to be applied therein. The fact that the particular contract only specifies the forum therefore becomes highly revealing as implying that the parties intended to leave the choice of law issue to the forum nominated.
1087:
factors such as: where evidence is situated or more readily available, whether foreign law applies and whether it differs from domestic law, the country with which the parties are connected and how closely, whether the defendants are seeking procedural advantages, and whether the plaintiffs would be prejudiced by the need to sue in a foreign court.
1130:
right to privacy), the gross inequality of bargaining power between the parties, the lack of alternatives for the consumers, the interest of the courts, clarity and certainty. Secondary factors included the relative cost and inconvenience to parties as well as the purpose and intent of the legislation. Justice Abella found that the contract was
136:
903:
Typically a forum selection clause applies to all parties to the contract. However it is possible for a contract to state that if A wishes to sue B, then one procedure applies, and if B wishes to sue A, a different procedure applies. The legality of asymmetric clauses differs in various legal system.
1086:
Test asks whether there is an enforceable contract binding the parties. If there is, the court must grant a stay unless the plaintiff demonstrates sufficiently strong reasons to show that they should not be bound by the forum selection clause. The Court, in exercising its discretion, should consider
808:
Although most contractual clauses are enforced by way of either an award of damages for breach, or by an injunction to restrain breach, the operation of jurisdiction clauses tends to operate at the interlocutory stage of a dispute. The existence of a jurisdiction clause in an agreement will normally
1020:
by Marty Gould, who argues that, unlike most federal courts – which have enforced such clauses in the consumer context – a state court in
Illinois correctly refused enforcement in connection with a claim relating to an online dating service contract. Proponents of enforceability take issue with the
907:
Similarly, one party may be afforded alternative dispute resolution options. For example, a loan agreement may provide that if the borrower wishes to bring proceedings against the lender, that can only be done by way of arbitration. But if the lender wishes to make a claim against the borrower they
1129:
and a class of users. The plurality of the Court found that the contract was enforceable. However, the plaintiff met the burden of demonstrating strong cause as to why the clause should not be enforced. Factors considered in the majority's decision included: the nature of the right (constitutional
1050:
A number of
American states have enacted statutes that require franchisors to agree to litigate disputes with franchisees in-state. Those states include California, Wisconsin, and New Jersey. Although not all of these statutes contain language of exclusivity, the case law has generally interpreted
894:
each of the individual clauses in the contract are void, numerous legal systems, including
English law, provide that jurisdiction and arbitration clauses are a special case, and that such clauses may still be relied upon even when it is part of the case of the person relying upon them that the
1042:, Eric Sherby argues that most courts that have addressed the issue have glossed over the circular nature of the finding of "closely related" and that even those few judicial decisions that evince an awareness of the circularity problem have themselves fallen into the circular reasoning trap.
1108:
outlined factors which may justify departing from enforcement including: the plaintiff was induced to agree to the clause, the contract is otherwise unenforceable, the selected forum is unwilling or unable to accept jurisdiction, the claim or circumstances are outside of what was reasonably
671:. An exclusive jurisdiction clause mandates that all disputes must be resolved by a particular court, whereas jurisdiction confirms that a particular court may be used by the relevant parties, but does not preclude a party from commencing proceedings in another court if they wish to do so.
799:
over the parties. Because of this, some jurisdictions refuse to give effect to these clauses, declaring them to be void as against public policy. However, most jurisdictions now recognise and enforce forum selection clauses, so long as the parties were acting in good faith.
1015:
The enforceability of forum selection clauses in the consumer field is controversial. Many opponents of enforcement argue that the contracts that include such forum selection clause are contracts of "adhesion". This position is well summarized in an article in the
1109:
contemplated by the parties in agreeing to the clause, the plaintiff cannot longer expect a fair trial in the forum due to subsequent events that could not have been reasonably anticipated, or the enforcement of the clause would frustrate clear public policy.
1007:) that forum selection bylaws have become an established part of corporate governance in only a few short years. Their conclusion is that a board of directors adopting a forum selection bylaw "can reasonably expect" that the bylaw will be enforced.
1637:
1002:
Prior to 2010, it was uncommon for
American corporations to insert forum selection clauses in their bylaws. But that situation changed. Surveying the case law in 2015, Bonnie Roe, Daniel Tabak, and Jonathan Hofer have argued (in
835:
appointment of an agent to receive service of process in the relevant jurisdiction - this facilitates initiating process and avoids the need to make an application to court for leave to serve a defendant out of the jurisdiction
1178:
renders forum-selection and arbitration clauses in consumer and employment contracts unenforceable. In consumer transactions involving Quebec residents, Article 3149 provides jurisdiction to Quebec Courts to hear the dispute.
1029:
Courts are often required to determine whether a forum clause covers all parties (including non-signatories) to a transaction. Many courts resolve the scope issue by applying the "closely related" test. See e.g.
1268:
646:
the clause might refer to a combination, requiring a specific process to be carried out in a specific location, and if that process fails to resolve the issue, for litigation to be conducted in a particular
740:
If the parties do no more than nominate a forum, this is no more than an indication that they intend that forum's law to apply. There are many reasons why parties may select a forum (see a discussion of
1368:
788:
Where a contract does not contain a forum selection clause, the defendant may bring an action to have the plaintiff's action stayed based on the fact that the selected forum is not convenient (
989:
Currently, a U.S. Circuit Court split is emerging over whether forum selection clauses in a contract supersede pre-existing arbitration clauses in regulatory membership rules, such as FINRA.
831:
In a complex agreement the forum selection clause will often be accompanied by a number of related clauses (either in the same contract or in a collateral document). These may include:
1427:
1483:
Marty Gould, "The
Conflict Between Forum-Selection Clauses and State Consumer Protection Laws: Why Illinois Got It Right in Jane Doe v. Match.com", 90 Chi.-Kent. L. Rev. 671 (2015).
964:
959:
whereas it is likely to respect a clause that points to a specific forum with the express exclusion of others. Two
October 2011 appellate rulings illustrate the difference. In
1075:. The Supreme Court endorsed forum selection clauses for providing "certainty and security in transaction". The Court reaffirmed the strong cause test found in the English
851:. This precludes or limits the ability of litigants to apply for proceedings to be stayed or dismissed on the grounds that they have been brought in an inappropriate forum.
1679:
1346:
1391:
1188:
1155:
between Uber and a class of drivers. The clause indicated that disputes were to be resolved by arbitration in the
Netherlands. The majority held the clause was
215:
1301:
908:
may do so by way of arbitration or by proceedings in a certain court. These are various called "option clauses", "asymmetric clauses" or "hybrid clauses".
773:
If the parties have selected a jurisdiction as the place for the resolution of a dispute, the implication is that the courts may nevertheless apply their
547:
1287:
1159:
and thus unenforceable. They assert that standard form contracts can create inequality of bargaining power between the parties. The Court asserted that
986:
if the parties' contract provides that the agreed upon venue is a court in New York and if the transaction involved an amount more than $ 1 million.
982:
The state of New York has a statute expressly dealing with those circumstances under which a New York court may not dismiss a case on the grounds of
521:
1263:
56:
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operate to enable a court to take jurisdiction in a particular matter, or may provide strong grounds for another court (not the chosen court) to
922:
1423:
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which includes their general choice of law principles. Thus, in the ordinary course of legal events, the forum court may identify and apply a
1537:
1444:
1412:
201:
932:
703:
under which all relevant disputes will be resolved. If there is an express selection, this choice will be respected so long as it is made
823:
Although it is theoretically possible to sue for damages for bringing proceedings in breach of a jurisdiction clause, examples are rare.
1638:"Forum Selection Clauses in Canada: Enforceability in Consumer Contracts May be an Issue after Recent Supreme Court of Canada Decision"
1212:
854:
contractual submission to the relevant jurisdiction - this assists in any application to enforce a subsequent judgment in another state
687:
should be applied to resolve the dispute. In this, there is an important distinction to be made between a forum selection clause and a
26:"Dispute resolution clause" redirects here. For other contract clauses concerning negotiation and mediation in resolving disputes, see
1071:
resulted in damage to equipment in transit. The exclusive forum selection clause indicated that any claims had to be brought forth in
103:
122:
749:
the forum has established significant expertise in the relevant areas of law, e.g. shipping, charterparties, carriage by air, etc.;
75:
845:
waiver of any objection to the chosen forum - for example, parties may add a clause where each party waives their right to assert
1192:
507:
82:
1143:
540:
60:
1592:
1051:
these statutes as invalidating contractual clauses that require disputes to be resolved out of the franchisee’s home state.
238:
1251:
89:
1563:
920:
has upheld forum selection clauses on several occasions, and has suggested that they should generally be enforced. See
1470:
1237:
1105:
917:
871:
waiver of other procedural provisions which might apply to foreign litigants, such as the right the request they post
1195:. The Hague Convention does not apply to disputes involving consumers, for example Quebec's Consumer Protection Act.
71:
135:
49:
1719:
1714:
948:
cases, however, arose under the Court's admiralty jurisdiction, not under diversity of citizenship jurisdiction.
659:
This contract is governed by the laws of
England and any dispute shall be finally resolved by the English courts.
606:
533:
463:
451:
358:
1618:
470:
1148:
1122:
1060:
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Forum selection clauses have been criticised by a minority of courts as improper attempts to divest them of
663:
When the clause chooses a particular jurisdiction for the resolution of disputes, it may do so either as an
601:
relating to that contract will be resolved in a specific forum. They usually operate in conjunction with a
971:
because the forum selection clause made German courts the exclusive forum. By contrast, the same court in
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Forum selection clauses often gravitate towards the courts of large commercial centres, like London,
20:
1680:"Contracting Out of Access to Justice: Enforcement of Forum-Selection Clauses in Consumer Contracts"
96:
1369:"The validity of unilateral "hybrid jurisdiction" clauses has become less certain under French law"
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376:
349:
182:
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all the major witnesses may be resident within the jurisdiction making the forum convenient (see
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477:
340:
309:
1323:
1533:
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there may be no corruption or other outside influence to affect the fairness of the judgments;
655:
covering both the proper law of the contract and the forum for resolving disputes might read:
278:
868:
requiring the parties to resolve their disputes through arbitration in the appropriate forum
838:
594:
331:
158:
1431:
726:
640:
484:
904:
For example, they are generally enforceable under
English law, but not under French law.
762:
may be efficient and minimise losses arising through any delay in arriving at a judgment;
1288:"English Court of Appeal confirms Damages Award for Breach of a Jurisdiction Agreement"
1167:
can deprive parties of possible remedies thus violating their reasonable expectations.
1068:
816:
Such clauses are sometimes enforced against proceedings in foreign courts by use of an
742:
683:
stage in a conflict case requires the forum court to decide which of several competing
446:
417:
367:
295:
270:
1703:
1528:
Sherby, Eric. "Forum
Selection Clauses In International Commerce". In Berger, James,
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Forum selection clauses in a commercial contract are typically strictly enforced. In
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680:
301:
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1273:
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1347:"Asymmetric jurisdiction clauses protected by Brussels Recast anti-torpedo rules"
16:
Contract clause which requires disputes to be resolved in a given manner or court
636:
322:
316:
38:
1256:
Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP
979:
because the clause was not exclusive, and the litigation continues in America.
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861:
in the relevant forum - especially if the chosen forum is in the United States
733:
700:
598:
393:
255:
1456:
704:
632:
975:, 08-1358, affirmed the refusal of the lower court to refer the parties to
967:
in New York City affirmed the dismissal of a case that sent the parties to
1238:"Foreign judgments, foreign contracts and dangers of jurisdiction clauses"
1213:"Governing Law and Choice of Forum Clauses Explained | LexisNexis Canada"
1126:
264:
27:
1072:
976:
968:
1516:
1471:"Forum selection bylaws continue to gain ground, but questions remain"
1498:
189:
1593:"Douez v Facebook: Forum Selection Clauses in Contracts of Adhesion"
1324:"Relying on an exclusive jurisdiction clause in a disputed contract"
707:, i.e. the subjective intention prevails unless the purpose is to:
1445:"Using Forum Selection Clauses to Avoid Default Arbitration Rules"
1302:"Court has jurisdiction even when the underlying contract is void"
718:
617:
134:
1392:"Italian Supreme Court Considers Unilateral Jurisdiction Clauses"
858:
684:
32:
714:
the operation of some mandatory provisions of a relevant law,
1619:"Forum Selection Clauses and Consumer Contracts in Canada"
1564:"Supreme Court of Canada - SCC Case Information - Search"
1269:
Société Nationale Industrielle Aérospatiale v Lee Kui Jak
961:
Future Industries of America v. Advanced UV Light GmbH
965:
United States Court of Appeals for the Second Circuit
752:
the standard of judicial decision making may be high:
1125:
refused to enforce a forum selection clause between
616:
that all disputes must be litigated in a particular
1067:2003 SCC 27. The dispute arose after a breach of a
63:. Unsourced material may be challenged and removed.
890:Despite the general rule that if a contract is
699:, the parties are usually free to nominate the
657:
1059:Forum selection clauses were addressed by the
973:Global Seafood Inc. v. Bantry Bay Mussels Ltd.
1189:Hague Conference on Private International Law
1134:and thus unenforceable under step one of the
627:that disputes must be resolved pursuant to a
597:element allows the parties to agree that any
541:
8:
1623:Boston University International Law Journal
1494:Manetti-Farrow, Inc. v. Gucci America, Inc.
1102:Expedition Helicopters Inc. v Honeywell Inc
1032:Manetti-Farrow, Inc. v. Gucci America, Inc.
729:involved in the signing of the contract, or
612:There are three principal types of clause:
548:
534:
154:
1557:
1555:
1532:. American Bar Association. pp. 292–293.
1082:Absent other applicable legislation, the
123:Learn how and when to remove this message
28:Contract § Mediation and negotiation
1530:International Aspects of U.S. Litigation
1040:International Aspects of U.S. Litigation
1562:Canada, Supreme Court of (2001-01-01).
1204:
881:which a party might have the benefit of
499:
433:
287:
223:
167:
157:
923:The Bremen v. Zapata Off-Shore Company
1587:
1585:
1583:
202:Conflict of laws in the United States
7:
1304:. Allen & Overy. 6 November 2008
1250:See for example the decision of the
955:will not necessarily honor a simple
933:Carnival Cruise Lines, Inc. v. Shute
61:adding citations to reliable sources
1443:Suskin, Howard; McWilliams, Emily.
1349:. Allen & Overy. 27 March 2017
1236:Cooper Grace Ward (27 July 2016).
14:
1390:Claudio Perrella (8 April 2013).
1183:Proposed international convention
1046:Franchise and dealership disputes
1025:Scope of a forum selection clause
732:there was some other evidence of
1193:Hague Choice of Court Convention
589:, depending upon its form) in a
508:Enforcement of foreign judgments
37:
1144:Uber Technologies Inc. v Heller
48:needs additional citations for
857:waiver of a right to trial by
1:
1286:Gisele Ruehl (31 July 2014).
665:exclusive jurisdiction clause
1662:"Uber Technologies v Heller"
1413:US Court of Appeals document
1326:. Kennedys. 18 December 2015
1252:United Kingdom Supreme Court
1171:Consumer contracts (Quebec)
1151:also refused to enforce an
918:United States Supreme Court
691:. As an application of the
643:or expert determination; or
624:agreed upon by the parties;
1741:
1165:forced arbitration clauses
609:of the relevant contract.
25:
18:
1617:Monestier, Tanya (2018).
1540:(hereinafter: "Sherby").
1501: (9th Cir. 1988).
1021:assertion of "adhesion".
912:The situation in the U.S.
886:Clauses in void contracts
877:waiver of any applicable
570:dispute resolution clause
359:Lex loci delicti commissi
163:private international law
1519: (2d Cir. 1993).
717:there was an element of
639:, or a hearing before a
72:"Forum selection clause"
19:Not to be confused with
1149:Supreme Court of Canada
1123:Supreme Court of Canada
1106:Ontario Court of Appeal
1065:Z.I. Pompey v ECU Line,
1061:Supreme Court of Canada
1055:The situation in Canada
1018:Chicago-Kent Law Review
434:Substantive legal areas
1274:[1987] UKPC 12
1260:[2013] UKSC 35
1163:, forum selection and
957:forum selection clause
661:
653:forum selection clause
574:choice of court clause
566:forum selection clause
492:Hague Trust Convention
426:Forum selection clause
402:Lex loci celebrationis
209:Public policy doctrine
152:
1517:996 F.2d 1353
797:personal jurisdiction
605:which determines the
578:governing law clause,
515:Anti-suit injunctions
386:Lex loci protectionis
224:Definitional elements
138:
1636:www.airdberlis.com.
1549:Sherby, pp. 276–278.
1499:858 F.2d 509
1449:Transaction Advisors
1096:Commercial contracts
984:forum non conveniens
848:forum non conveniens
818:anti-suit injunction
811:decline jurisdiction
790:forum non conveniens
767:forum non conveniens
689:choice of law clause
603:choice of law clause
568:(sometimes called a
410:Choice of law clause
247:Forum non conveniens
57:improve this article
21:choice of law clause
1176:Quebec's Civil Code
1147:, 2020 SCC 16, the
697:freedom of contract
669:jurisdiction clause
581:jurisdiction clause
377:Lex loci solutionis
350:Lex loci contractus
183:Incidental question
1684:McGill Law Journal
1430:2012-04-14 at the
1153:arbitration clause
1113:Consumer contracts
1011:Consumer contracts
899:Asymmetric clauses
895:contract is void.
879:sovereign immunity
873:security for costs
866:arbitration clause
629:dispute resolution
586:arbitration clause
341:Lex loci rei sitae
310:Habitual residence
288:Connecting factors
153:
1568:scc-csc.lexum.com
1538:978-1-63425-558-5
1217:www.lexisnexis.ca
1121:2017 SCC 33, the
1119:Douez v Facebook,
631:process, such as
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279:Lis alibi pendens
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1720:Contract clauses
1715:Conflict of laws
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998:Corporate bylaws
839:service ex juris
804:Effect of breach
595:conflict of laws
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332:Lex loci arbitri
216:Hague Conference
176:Characterisation
159:Conflict of laws
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1091:Specific issues
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1036:Roby v. Lloyd’s
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993:Specific issues
963:, 10-3928, the
951:A court in the
946:Carnival Cruise
914:
901:
888:
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827:Related clauses
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727:undue influence
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641:special referee
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485:Forced heirship
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1157:unconscionable
1132:unconscionable
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1069:bill of lading
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