Civil Procedure Multistate Bar Practice Exam

What effect does a forum selection clause have in federal court?

1. It is not enforceable under any circumstances

2. It can be enforced if not unreasonable

3. It overrides all state court decisions

4. It must comply with state law

The correct answer is: It can be enforced if not unreasonable

A forum selection clause is a contractual provision that designates the jurisdiction where disputes related to the contract will be adjudicated. In federal court, the enforceability of a forum selection clause hinges on its reasonableness. The correct answer observes that a forum selection clause can be enforced if it is deemed not unreasonable. The U.S. Supreme Court has established that such clauses are generally enforceable, provided they are negotiated by both parties and not the result of fraud, undue influence, or a significant imbalance in bargaining power. Courts will uphold these clauses as long as they do not contravene public policy and are reasonable in terms of the chosen jurisdiction's connection to the parties or the dispute. This rationale is grounded in principles of contract law and promotes legal certainty and efficiency by honoring the parties' choice of venue. When the parties agree to a specific forum in a contract, federal courts will typically respect that choice unless there are compelling reasons to disregard it. In contrast, the other options do not accurately reflect the legal standards governing forum selection clauses in federal courts. Enforceability is not absolute or governed solely by state law, but rather is contingent upon the clause meeting reasonableness criteria. Similarly, the notion that it overrides all state court decisions does not apply