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Simple English definitions for legal terms
forum selection clause
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A quick definition of forum selection clause:
A forum selection clause is a part of a contract that says which court will decide a legal dispute if there is one. It helps to make sure that the court has the power to make a decision and that it is in the right place. In the past, courts did not always follow these clauses, but now they usually do. However, there are some exceptions, like if there is fraud or if the clause is not fair. In patent cases, the court can only be in certain places.A more thorough explanation:
A forum selection clause is a part of a contract that says which court and location will decide any legal disputes that may arise between the parties. It helps establish the court's power over the parties and the physical location where the court will exercise its power.
For example, if two companies from different states sign a contract that includes a forum selection clause stating that any disputes will be resolved in a court located in New York, then if a dispute arises, they will have to go to court in New York.
Historically, courts have been hesitant to enforce forum selection clauses, but recent cases have given them more weight. The Supreme Court has ruled that a forum selection clause should be given "controlling weight" in most cases, meaning that the parties will have to go to the court and location specified in the clause unless there are compelling reasons not to.
One example of a case involving a forum selection clause is Carnival Cruise Lines Inc. v. Shute. In this case, the Supreme Court upheld a forum selection clause contained in a form contract, meaning that the parties had not negotiated the clause. However, the Court also stated that form contracts are subject to judicial scrutiny for fundamental fairness. This means that if the forum selection clause is unfair or inconvenient for one party, the court may not enforce it.
Another example is Future Industries of America v. Advanced UV Light, where the court upheld a forum selection clause and a choice-of-law clause in a contract, even though the defendant had breached the contract. The court found that the clauses were valid and enforceable because they had been communicated to the parties and covered the claims and parties involved in the dispute.
In summary, a forum selection clause is a contractual agreement that designates the court and location where legal disputes will be decided. Recent cases have given them more weight, but courts will still scrutinize them for fairness and may not enforce them if they are unreasonable or unjust.