Forum-selection clauses are found in virtually every contract these days, yet very few attorneys put much thought into how they should be drafted. Most of us simply cut and paste the clause from another contract form and assume it will do the job. While that strategy may have worked in the past, a case currently pending before the U.S. Supreme Court may change the way all lawyers draft and litigate forum-selection clauses in the future.
The U.S. Supreme Court recently granted review of the 5th Circuit Court of Appeal’s opinion in In re Atlantic Marine Construction Co., which involved a Texas construction project with a subcontract that required litigation to be venued in the state or federal courts of Virginia. Despite the fact that the subcontract’s forum-selection clause was clear and otherwise enforceable, the 5th Circuit affirmed the district court judge’s decision not to enforce the forum-selection clause on convenience grounds. The district court believed enforcing the clause would have been too unfair to one of the parties and the majority of the witnesses. In making this ruling, the 5th Circuit joined the minority of federal courts on how forum-selection clauses should be enforced.