FORT LAUDERDALE BUSINESS LITIGATION: FORUM SELECTION CLAUSES

Contracting parties may stipulate to a particular forum for resolving future disputes. Am. K-9 Detection Servs., Inc. v. Cicero, 100 So. 3d 236 (Fla. 5th DCA 2012). This is known as a forum selection clause. The clause can be mandatory, which requires the parties to litigate in the particular chosen forum to the exclusion of all other forums, or permissive, which only constitutes consent to a particular forum without excluding all other forums. See World Vacation Travel, S.A. v. Brooker, 799 So. 2d 410 (Fla. 3d DCA 2001) (finding mandatory venue clauses require or unequivocally specify that a particular forum be the exclusive jurisdiction for litigation concerning the contract); Golden Palm Hospitality, Inc. v. Stearns Bank Nat’l Ass’n, 874 So.2d 1231 (Fla. 5th DCA 2004) (“A permissive forum selection clause may provide an alternative to the statutory choices of venue but it does not require the plaintiff to file suit in the forum referred to in the agreement.”). Peter Mavrick is a Fort Lauderdale business litigation attorney. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

Examples of permissive forum selection clauses are “the Creditor [Paris Bank] may choose to take legal proceedings to the competent Courts of the City of Guatemala” and “Grantor hereby consents to the jurisdiction” of Massachusetts. See Garcia Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d 273 (Fla. 1987); Shoppes Ltd. P’ship v. Conn, 829 So.2d 356 (Fla. 5th DCA 2002). In both examples, the contracting party could bring claims in Guatemala or Massachusetts, but did not have to. Id.

By contrast, the forum selection clause discussed in Ware Else, Inc. v. Ofstein, 856 So.2d 1079 (Fla. 5th DCA 2003) exemplifies a mandatory clause because it clearly limited litigation to Missouri. The clause provided that any litigation “shall have its venue located exclusively” in Missouri. Id. However, one does need to use the word “exclusively” to create a mandatory clause. In Golf Scoring Sys. Unltd., Inc. v. Remedio, 877 So. 2d 827 (Fla. 4th DCA 2004), a provision stating that the “parties hereto consent to Broward County, Florida, as the proper venue for all actions that may be brought pursuant hereto” was held to be mandatory because the word “the” referred to only one forum, to the exclusion of all other forums. Id. It would, nevertheless, be best practice to affirmatively state the selected forum is the only forum suit can be brought if it is your intention to create a mandatory forum selection clause.

Forum-selection clauses are not always valid. Although the clauses are presumptively enforceable, they can be invalidated by making a “strong showing” that enforcement would be unfair or unreasonable under the circumstances. See Carnival Cruise Lines, Inc. v. Shute, 113 L.Ed.2d 622 (1991). A Forum-selection clause will be invalidated if (1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy. Krenkel v. Kerzner Intern. Hotels Ltd., 579 F.3d 1279 (11th Cir. 2009). However, each of these prongs is difficult to establish because a clause is only considered unjust or unreasonable if enforcement would result in “no forum at all.” Espresso Disposition Corp. 1 v. Santana Sales & Mktg. Group, Inc., 105 So. 3d 592 (Fla. 3d DCA 2013). This happened in Lopez v. United Capital Fund, LLC, 88 So. 3d 421 (Fla. 4th DCA 2012) because the forum selection clause did “not tie the selection of a forum to any mutable and identifiable fact, only to the whim of the defendants’ choice.” As a result, the court refused to enforce the forum selection clause because there was no meeting of the minds regarding the forum’s location. Id.

Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.