Forum Selection Clauses in Contracts Explained
What Is a Forum Selection Clause?
A forum selection clause designates the specific court or tribunal that will have jurisdiction over disputes arising from the contract. While closely related to venue clauses, forum selection clauses can be more specific — naming not just a geographic location but a particular court system (e.g., federal courts vs. state courts).
Forum Selection vs. Venue
These terms are often used interchangeably, but there is a technical distinction:
- A venue clause typically specifies a geographic location (e.g., "courts located in Cook County, Illinois").
- A forum selection clause may additionally specify the type of court (e.g., "the United States District Court for the Northern District of Illinois") or even a non-judicial forum like arbitration.
In practice, many contracts combine both concepts in a single provision.
Enforceability
Forum selection clauses received strong endorsement from the U.S. Supreme Court in M/S Bremen v. Zapata Off-Shore Co. (1972), which held that such clauses are presumptively valid and enforceable. A court may decline to enforce one only if:
- The clause was obtained through fraud or overreaching
- Enforcement would be unreasonable or unjust
- The chosen forum would be so seriously inconvenient as to effectively deprive a party of its day in court
What to Watch For
- Mandatory vs. permissive language. "Shall be brought exclusively in" is mandatory. "May be brought in" is permissive and does not prevent filing elsewhere.
- Court system specificity. A clause that specifies federal court excludes state court, which may affect available claims and procedures.
- Consistency with arbitration clauses. If the contract also requires arbitration, ensure the forum selection clause is limited to proceedings that fall outside the arbitration requirement.
When to Consult a Lawyer
Consider consulting an attorney if the forum selection clause directs disputes to a jurisdiction or court system unfamiliar to you, or if you need to understand whether the clause can be challenged based on your specific circumstances.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.