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Forum Selection Clauses

Recently, the United States District Court for the District of Columbia reaffirmed the use of a forum selection clause in the consumer context. See, Hara v. Hardcore Choppers, LLC, 2012 U.S. Dist. LEXIS 162552 (D.D.C. 2012). That case involved a forum selection clause in a Final Work Order for motorcycle modifications and was successfully used by the corporation to transfer a case from the District of Columbia (where the underlying accident occurred) to the Eastern District of Virginia (where the corporation was located). Following well established Supreme Court precedent, the Hara Court observed that “[forum-selection] clauses are prima facie valid” and “should be honored by the parties and enforced by the courts”. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 12, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972). This presumption in favor of forum-selection clauses applies even to “non-negotiated boilerplate contracts.” Hara, citations omitted. This same analysis also applies in Maryland. See, Main Line Mech. of Va., Inc. v. Herman/Stewart Con., 2011 U.S. Dist. LEXIS 98751 (D.Md. 2011) (applying forum selection clause in Maryland contract).

Under Bremen, and as applied in both the District of Columbia and Maryland, a party seeking to invalidate a forum selection clause must make a “strong showing” that (1) “enforcement would be unreasonable and unjust”; (2) “the clause was invalid for such reasons as fraud or overreaching”; (3) “enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or judicial decision”; or (4) “trial in the contractual forum would be so gravely difficult and inconvenient that [the plaintiff] will for all practical purposes be deprived of his day in court.” Hara, supra. This is a heavy burden for litigants seeking to avoid their contractual promises.

Benefits of a Forum Selection Clause

Forum selection clauses, either alone or in connection with an arbitration agreement, can be useful in many instances and should be considered by corporate health care providers and/or businesses. When properly drafted and executed, a forum selection clauses can help assure that the corporation will receive a fair trial before an impartial judge and/or jury.

For more information on how to effectively implement a forum selection clause into your business practice, contact the attorneys at Walker, Murphy & Nelson, LLP, LLP today.

Disclaimer: This article is for general informational purposes only. Nothing contained herein constitutes legal advice, nor does it create an attorney-client relationship. All persons reviewing this should consult counsel for advice regarding any specific legal questions and any unauthorized use of this information is expressly prohibited.