forum selection clause means: Commonly, a “forum choice clause” is a contractual arrangement that specifies the location and court where parties want their legal disputes decided. “. (in Legal Dictionary)

What else does forum selection clause mean?

  • Forum selection clauses are used to give a court “personal jurisdiction” as well as to create “venue.” The court has the power to exercise its authority on a party. The physical place where the court exercise its authority is called venue. A forum selection clause is a provision that gives a particular court the ability to settle a dispute. (in Legal Dictionary)
  • A “standard form” or “adhesion” contract may allow a litigant to present an extraordinary case. The Court ruled in Carnival Cruise Lines Inc. against Shute that form contracts that contain a forum selection clause are generally valid. Atlantic Marine does not consider it an exception that a contract made without negotiation or bargaining. (in Legal Dictionary)
  • Forum selection clauses are not usually enforced by courts. The Court stated in MS Bremen v. Zpata Offshore Co. that forum selection clauses are often seen as contrary to public policy and to stop a proper court hearing a dispute. The court ruled that the forum clauses should govern, despite the fact that there was no strong evidence that they should be thrown out. “. (in Legal Dictionary)
  • However, courts will use their discretion to decide whether or not to enforce forum selection clauses. Future Industries was ruled invalid by the same court. This is due to its broad language. Global Seafood Inc., v. Bantry Bay 2011, The Second Circuit decided that the expression “is governed under Irish Law and the Irish Courts” does not indicate a clear intent of the parties to give exclusive jurisdiction to Irish Courts. Although the court found the “govern” term grants Irish courts jurisdiction it doesn’t give the courts sole jurisdiction. The forum selection clause therefore was invalid. (in Legal Dictionary)
  • The forum selection clauses are no longer inoperative but can be used to control if exceptional circumstances occur. Exceptional situations are those where there is a compelling public interest factor under SS1404a or when the clause can be invalidated. A forum selection clause in a contract could be considered an exception case under certain conditions. The scope of Atlantic Marine’s extraordinary case limitation is not clear and may lead to more litigation until the Supreme Court gives a better definition. (in Legal Dictionary)
  • Carnival Cruise said that form contracts can be subject to judicial scrutiny in order to ensure fundamental fairness. A court may decide whether the forum choice clause is inconvenient. Inconvenient venues are those that have no connection with the contract of the parties or which discourage a party without bargaining power from filing suit. This concern is generally eliminated by a negotiated contract. There are both actual negotiations between the parties and mutual agreements regarding venue. (in Legal Dictionary)
  • Atlantic Marine Const. Co., Inc. v. U.S. Dist. Ct. For the Western District of Texas, Court further clarified the relationship between a forum choice clause and SS1404a. According to the Court, a forum selection clause should be given “controlling weight in all but exceptional cases”, thereby altering the relevant SS1404a analysis. Three conclusions were made by the court: (in Legal Dictionary)
  • Stewart Organization, Inc., v. Ricoh Corp. The plaintiff brought suit in federal court against Ricoh Corp for violating the forum selection clause. In relying on SS1404a the defendant requested that the trial court transfer the case to a federal court as described in the forum choice clause. The Court addressed the relation between SS1404a, which allows a plaintiff change forums due to counterclaim concerns, and a forum choice clause that prevents a plaintiff transferring forums. It stated that a forum select clause was not controlling, but was a significant factor for a court when deciding whether to transfer a case pursuant to SS1404a. A forum selection clause should not be given any dispositive consideration… or no consideration…but the consideration… as provided by SS1404a. “. (in Legal Dictionary)
  • Atlantic Marine doesn’t state whether any other facts may make a case “exceptional” except for the presence of compelling public interests factors. The Bremen court ruled that fraud or overreaching when negotiating contracts invalidates the forum choice clause. Their presence is therefore considered an exception under Atlantic Marine. Bremen supports, in fact, the notion that an exception case under Atlantic Marine is any legal theory which allows one party to cancel the forum selection clause, such as a mutual material error. (in Legal Dictionary)
  • In TC Heartland v. Kraft 2017, the Supreme Court ruled that a patent owner cannot sue an infringing plaintiff in a district court in which the defendant is under personal jurisdiction. Patent infringement lawsuits can only be filed in the states in which the infringing defendant is incorporated or where there have been acts of infringement. Patent litigation cases are therefore limited in their ability to be filed in the states where they were incorporated or districts that have established regular and permanent places of business. (in Legal Dictionary)
  • This deferential approach to forum selection clauses has been maintained by the Second Circuit Court of Appeals. Future Industries of America in Advanced UV Light 2011 was upheld. The court also upheld its forum selection clause. (in Legal Dictionary)
  • In Phillips v. Audio Active Ltd. 2007, the Second Circuit created a 4-part balancing test to determine validity of a forum-selection clause. (in Legal Dictionary)