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Forum Selection Clause Prevails Over State Venue Law

Tuesday, November 01, 2011 07:56 am

 

The Supreme Court has held that forum selection clauses  shall be enforced unless the challenging party can demonstrate that the clause is "unreasonable." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972). Doing so can be a "heavy burden" for construction companies who regularly agree to such clauses.

In Main Line Mechanical of Va., Inc. v. Herman/ Stewart Constr. & Devel., Inc., 2011 U.S. Dist. Lexis 98751 (D. Md. September 1, 2011), during a contract breach dispute, a Maryland-based contractor sought to enforce the forum selection clause contained in its subcontract with a Pennsylvania-based sub. The sub challenged the validity of the clause, which stated: "Any and all litigation between the parties to this subcontract shall only be filed in [courts] located in Montgomery County, Maryland."

3 prongs of enforceability

Under federal law, there are three criteria for determining the enforceability of a forum selection clause. A clause will be enforced if: (1) it is mandatory, (2) it is enforceable against the particular claims in dispute[...]

 
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