Forum Selection / Venue Provisions in Contracts are Enforceable

Posted by David Adelstein on March 31, 2018
Appeal, Trial Perspectives

If you have a dispute, one of the first considerations should be “where do I sue?” If the dispute may arise out of or relate to a contract, you want to look at your contract.  Many contracts contain forum selection or venue provisions identifying the exclusive venue governing your dispute. 

For instance, the provision may say something to the effect, “The exclusive venue for any dispute arising out of or relating to this contract shall be in Miami-Dade County Florida.”   This means that if you plan to sue you need to do so in a court located in Miami-Dade County, Florida, even if you have an argument that the venue should be in a different, more preferred location.  Venue and forum selection provisions are important provisions because they contemplate where a lawsuit must be brought in the event such a lawsuit occurs down the road.  While of course you hope for the best with any agreement, you know that disputes occur, so you plan for the potentiality of that risk.

As a contracting party, you have the right to contractually agree to a forum selection / venue provision; you can contractually agree to the forum governing your dispute.  Baker v. Economic Research Services, Inc. 43 Fla.L.Weekly D643a (Fla. 1st DCA 2017).  Absent limited exceptions, these provisions will be deemed enforceable.  Id.   A judicial order as to venue is also the type of non-final order that can be appealed immediatelyId.  Thus, even if you sued in a venue contrary to the forum selection provision in your contract and the trial court agreed with you, the other side can appeal this order immediately arguing that the forum selection provision places venue in a different location.

In Baker, employees entered an employment agreement that contained a forum selection provision that placed venue in Delaware.  The employees left to work for a competitor and the employer sued its former employees in Leon County, Florida.  An argument the employees raised was that the lawsuit should have been filed in Delaware, not Florida, based on the forum selection provision.  The trial court denied the motion.  But, remember, an order as to venue can be appealed immediately so the employees appealed.  The appellate court reversed the trial court finding that claims arising out of or relating to the agreements need to be filed in Delaware based on the forum selection provision.  The forum selection provision survives any termination of the agreements such that if the employer’s claims have a significant relationship (nexus) to the agreement, then the claims must be brought in Delaware.

As you can see, forum selection provisions are important because they will largely dictate where a party must sue or be sued.  Take such provisions into consideration when entering an agreement.

For more information on forum selection / venue provisions, you can also check out this article.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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