The Choice of Forum Trap: When Your Contract Sends You to Court 1,000 Miles Away
Imagine being dragged into a lawsuit in a state you’ve never done business in. That’s the power of a forum selection clause. These provisions dictate where disputes must be heard—often in a location that favors the other side. Many business owners don’t even notice them until it’s too late.
What Is a Forum Selection Clause?
A forum selection clause specifies the court or jurisdiction where disputes must be filed. It can be as broad as “all disputes shall be litigated in Delaware” or as narrow as a particular county court. These clauses often appear in commercial leases, vendor agreements, construction contracts, and franchise documents.
Why They’re So Risky
- Inconvenience: You may have to hire out-of-state counsel and travel extensively.
- Cost: Litigating hundreds or thousands of miles away multiplies expenses.
- Home Court Advantage: The other party picks the forum where they’re most comfortable—and where judges may be more favorable to them.
- Loss of Leverage: The threat of expensive litigation far from home can pressure you into settling unfairly.
A Question I Hear All the Time
Clients frequently ask: “Can I fight a forum selection clause?” The answer: sometimes. Courts will enforce them if they’re reasonable, but there are exceptions—such as when enforcing the clause would be unfair, against public policy, or practically impossible for one side.
How to Protect Yourself Before You Sign
- Negotiate Home Turf: Push for your state (or county) as the forum for disputes.
- Consider Neutral Forums: If compromise is necessary, choose a mutually convenient jurisdiction.
- Watch for Arbitration Clauses: Some contracts pair forum selection with mandatory arbitration, limiting your options even further.
- Get Legal Review: A quick review can flag jurisdiction clauses that may cost you dearly down the road.
Don’t Let Distance Decide Your Case
At JDE Law Firm, PLLC, we review, negotiate, and litigate contracts with forum selection clauses. If you’ve been served out-of-state, or if you’re about to sign an agreement with a hidden jurisdiction trap, we’ll fight to keep your case on your home turf.
📞 NY: 718-966-0877 | NJ: 732-490-7120
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