forumselection

Forum selection is a contractual provision that designates the court or jurisdiction where disputes related to the contract must be brought. It may specify a particular court, a specific country or state, or require litigation to occur in a designated forum; it can also point to arbitration as the preferred mechanism for dispute resolution.

The purpose of a forum-selection clause is to provide predictability and efficiency by reducing disputes over where a case should be heard. It can simplify enforcement, aid in choosing applicable procedural rules, and align with related choices of law. These clauses are commonly used in commercial contracts, including supplier agreements, licensing deals, and financing arrangements, and may operate alongside or apart from arbitration clauses.

Types of forum selection clauses include exclusive (mandatory) versus non-exclusive (permissive), and domestic versus international. An exclusive clause requires disputes to be heard in the designated forum, while a non-exclusive clause allows suit elsewhere if appropriate.

Enforceability varies by jurisdiction but is generally respected in many legal systems. In the United States, forum-selection clauses are typically enforceable and courts may dismiss or transfer a case to the designated forum, subject to customary private and public interest considerations. The U.S. Supreme Court’s decision in Atlantic Marine Construction Co. v. United States District Court (2013) reinforces that such clauses should control absent unusual circumstances. Courts may consider prosecutorial convenience, access to evidence, and convenience to parties, as well as public policy concerns. Some consumer or employee contracts receive heightened scrutiny, and enforceability can be limited by anti-suit injunctions or public policy.

Internationally, enforcement depends on local law and any applicable treaties or public policy concerns. Drafting clarity, explicit designation of forum, and alignment with any arbitration provisions are prudent practices.