As a business attorney at Spaulding Law, I am a big proponent of including provisions in my clients’ contracts regarding where lawsuits regarding the subject matter of the contract can be brought. These provisions are officially called forum selection clauses.
What Do Forum Selection Clauses Look Like
An example of a forum selection clause would be to select to have any lawsuit filed “in the state courts in Forsyth County, Georgia or in the Federal Courts in the Northern District of Georgia.” There is more to the full provision, including a statement that all parties agree to the exclusive jurisdiction over them and all disputes in that forum, however, this gives you an idea of how straightforward these provisions are.
How Can They Be Fought
In Georgia, a negotiated agreement that contains a forum selection clause will be upheld absent a showing by the other party of a compelling reason why the provision should not be upheld in the particular situation at hand. The first and most obvious way a party can attempt to hold a forum selection clause invalid is a relatively obvious one, known as forum nonconveniens. Otherwise known as an inconvenient forum, the party would have to show that the forum chosen in the contract is so inconvenient that the party would, in essence, be deprived of his day in court. To do this, the opposing party would have to show such things as the fact that all or most witnesses are residing in a far-off state. The mere fact that the forum selected in the contract is inconvenient is not enough and therefore the bar is set very high to overturn a forum selection clause on inconvenience grounds.
The other scenario where a party can challenge a forum selection clause is where he/she/it can show fraud, undue influence or overwhelming bargaining power by the other party in entering into the agreement containing the forum selection clause. As you can imagine, this too is a very high bar not likely to be found in most cases.
What Are The Benefits of a Forum Selection Clause
Therefore, there is a very good chance that a forum selection clause in a contract in Georgia will be upheld. While that is great, you may wonder what is the big deal in having a forum selection clause. If you can get a forum of your selection, it could be a very big deal. Naturally, you would want the forum to be in your or your company’s home State and if possible, home county. This will save you money in a lawsuit in not having to compel and pay for witnesses to testify in another state or country, your travel expenses to and from court, not to mention being more convenient in meeting with your attorney if you select one from that forum. Moreover, if you work with a seasoned trial lawyer in drafting your contract and thus picking the forum for this provision, you can select a local forum that is known to be business savvy if that is important or tough on breach of contract issues.
We often find that these provisions are fought over. Especially in multi-state or international contracts because each party whats all lawsuits to be filed in their State or country. Either way, work with an experienced business attorney that also has trial experience or lawyers in his or her office with experience trying contract cases to give you perspective on what forum in your state to select.