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Forum Selection Clauses & Foreign Laws

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Forum selection clauses could make it geographically prohibitive for you to litigate against the other party if a conflict were to arise. These clauses stipulate that if there is any sort of litigation, it must occur in a specific venue. Agreeing to a clause like this could put you in a situation ranging from inconvenient or expensive to purely untenable.

“The first thing I tell clients to avoid is ‘venue selection’ or ‘forum selection’ clauses that require that any dispute be resolved only in a far-off jurisdiction,” said Sam Ventola, a commercial litigation attorney and founder of Ventola Law. “Signing such a provision can effectively prevent you from obtaining any redress in court if it’s too expensive to appear in the selected jurisdiction, and, at a minimum, they put you at a tremendous disadvantage.”

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Foreign laws – If you sign a contract subject to the laws of a foreign country, you could find yourself without the protection of rights you took for granted and assumed would cover the terms of the contract. Always be sure you understand which national laws your contract is subject to and the implications of those laws.

“Contracts governed by the laws of another country that don’t provide the same rights for individuals and companies [can] be prohibitively expensive for you or your company to contest or litigate,” said Anne Miner, founder of The Dunvegan Group.

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