Any business owner selling products or services across state lines should make sure the company’s form contracts include a clause specifying the law, jurisdiction and venue for resolving any disputes arising out of the contract or the goods or services offered under it. Otherwise, you could wind up fighting long-distance battles and paying lawyers you’ve never met to interpret another state’s law and decide your fate.
In earlier days, such “forum selection clauses” were disfavored as being against public policy. However, they have since come to be accepted as a common and necessary aspect of modern commercial transactions. The U.S. Supreme Court recognized this shift in view point as far back as 1972. See The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, *10 (U.S. 1972). The Court went on to explain that, where “[t]he choice of that forum was made in an arm's length negotiation by experienced and sophisticated businessmen, and, absent some compelling and countervailing reason, it should be honored by the parties and enforced by the courts.” See id. *12.
Nearly all state supreme courts have spoken likewise. For example, the Ohio Supreme Court has noted that, “absent evidence of fraud or overreaching, a forum selection clause contained in a commercial contract between business entities is valid and enforceable, unless it can be clearly shown that enforcement of the clause would be unreasonable and unjust.” Kennecorp Mortgage Brokers v. Country Club Convalescent Hosp, 66 Ohio St. 3d 173 (Ohio 1993).