in Ohio). If the parties intend for a forum selection clause to mean an action may be brought in any state or federal court within the specified state, they may be surprised to find that they have unknowingly limited themselves to state court by using the word "of." Conversely, if the parties intend to allow only state court actions, but use the words "courts in Utah," they may open themselves up to federal courts as well. In order to ensure there is some certainty, parties must use the correct language to specify the court or courts they want to have jurisdiction. a jurisdictional provision is mandatory, rather than permissive. A mandatory forum selection clause "contains clear language showing that jurisdiction is appropriate only in the designated forum." Am. Soda, LLP, 428 F.3d at 926 (citation omitted). "In contrast, permissive forum selection clauses authorize jurisdiction in a designated forum, but do not prohibit litigation elsewhere." Id. at 926-27. Hence, it is not enough to just set forth the desired forum. In order to create any sort of certainty, specification of forum must also be accompanied by "mandatory or obligatory language." Id. at 927. Words like "shall" should be used. If there is no express language setting forth a forum selection clause as pair the forum selection with additional language indicating the parties' intent to make the venue exclusive. Id. This can be done using words such as "exclusive forum." Id. Such language can help ensure a provision meets the foundational requirement that "a waiver of one's statutory right to remove a case from state to a federal court must be clear and unequivocal." Id. (internal quotation marks and citation omitted). Overall, such provisions do not need to be long or complex to be effective. The following provides an example incorporating the information touched upon in this article: "The Third District Court in and for Salt Lake County, State of Utah, shall have exclusive jurisdiction over the subject matter of this Agreement, any dispute or controversy arising out of this Agreement, and the parties hereto." whose law is to apply are generally enforceable. See, e.g., Robinson v. Ladd Furniture, Inc., 995 F.2d 1064 (4th Cir. 1993) ("North Carolina courts generally enforce choice of law provisions"); Resolution Trust Corp. v. Northpark Joint Venture, 958 F.2d 1313, 1318 (5th Cir. 1992) ("Under the Texas rules [where] parties have agreed to an enforceable choice of law clause, the law of the chosen state must be applied."). However, as with jurisdiction and venue, provisions governing whose law applies are also subject to minimum contacts requirements. A party must have See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (discussing the "constitutional touchstone" of minimum contacts). Also, courts at times disregard choice of law language due to conflict of laws and public policy doctrines. See, e.g., Wissot v. Great-W. Life & Annuity Ins. Co., 619 F. App'x 603, 604 (9th Cir. 2015) ("we enforce the contract's choice- of-law provision unless the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties['] choice, or the application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue.") (internal quotation marks and citation omitted). A phrase such as "the law of the State of Utah shall apply without regard to conflict of laws principles" can help bolster an argument that the parties should be bound by the language as agreed upon in the contract. the terms "in" versus "of," choosing mandatory words rather than permissive, and adding additional choice of law protection can go a long way in decreasing the unknowns of tomorrow when entering into a contract today. |