A cautious drafter would be advised to include in a comprehensive forum-selection provision elements that might seem redundant. Here’s why:
An agreement could provide for either permissive (also know as non-exclusive) jurisdiction or mandatory (also know as exclusive) jurisdiction. The following language provides for permissive jurisdiction:
Any party commencing against the other party any legal proceeding (including any tort claim) arising out of this agreement may bring that proceeding in the United States District Court for the Eastern District of Pennsylvania or in any court of the Commonwealth of Pennsylvania sitting in Philadelphia.
That sentence might seem sufficient, but it focuses on the rights of the parties as potential plaintiffs. As noted in Tina Stark’s book Negotiating and Drafting Contract Boilerplate, you’d be advised also to focus on the parties in their capacity as potential defendants by having each party forfeit its right as a defendant to contest the court’s personal jurisdiction over it (other than on grounds of insufficient service of process). Here’s some language you could tack on to accomplish that:
Each party hereby submits to the nonexclusive jurisdiction of those courts for purposes of any such proceeding.
So now you’re covered, aren’t you? Well, not necessarily—as Tina’s book notes, a court might hold that a defendant’s claim of inconvenient forum trumps the forum-selection provision. That’s why the cautious thing to do would be to include in a subsection something along the lines of the following:
Each party hereby waives any claim that any a legal proceeding (including any tort claim) brought in accordance with section X(a) [first subsection of the forum-selection provision] has been brought in an inconvenient forum or that the venue of that proceeding is improper.
But reader Mike Wokash recently pointed out to me a case that stands for the notion that not all courts are of the view that defenses to forum selection are only waived if they’re waived explicitly:
Baum Research & Dev. Co. v. Univ. of Mass., 2007 U.S. App. LEXIS 23737 (Fed. Cir. Oct. 10, 2007) involved a claim for breach of contract and patent infringement brought by plaintiff inventor against defendant state university. The university filed a motion to dismiss, asserting immunity from suit based on the Eleventh Amendment. The district court denied the university’s motion to dismiss, ruling that any immunity was waived in the contract, which stated that “all parties agree to proper venue and hereby submit to jurisdiction in the appropriate State or Federal Courts of Record sitting in the State of Michigan.”
The university filed an interlocutory appeal, but the appellate court rejected the university’s argument that the contract provision was in “vague language” and was not the “unequivocally expressed” consent to suit that precedent required. It held that the contract terms were clear and that the university had agreed to submit to the jurisdiction of a federal court in Michigan as to disputes arising from the contract. The appellate court affirmed the decision of the district court.
But it’s generally best to address a potential issue in the contract rather than leaving it to be resolved by the courts. So if you find yourself negotiating a contract with an agency of one of the 50 states, you might want to include a waiver of sovereign immunity in the forum-selection provision.
By the way, the forum-selection language included above is hardly my last word on the subject; when I come up with definitive language, I’ll let you know. Also, note that the above language doesn’t address service-of-process issues.