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Forum Selection Clause: Attornment to Jurisdiction by Contract
Question: How does a forum selection clause impact dispute resolution in contracts?
Answer: A forum selection clause designates a specific location for resolving disputes, enhancing predictability and efficiency in legal proceedings. At Zofa Legal, we provide tailored paralegal services to help you navigate these agreements, ensuring your rights are protected while adhering to legal standards.
Forum Selection Clause
Parties to contracts may expressly attorn by including a forum selection clause that specifies where disputes arising from the contractual relationship must be resolved. Such clauses may identify a specific province, city, or even county, as the agreed geographical location, forum. When a dispute arises, courts will generally uphold these agreements unless the party resisting enforcement can demonstrate a strong cause to disregard the forum selection clause. On this point, in Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., [2012] 1 S.C.R. 359, the Supreme Court of Canada confirmed that explicit contractual attornment will ordinarily be enforced, and that participation in proceedings without timely objection may also amount to attornment by conduct. Specifically, the Supreme Court said:
[9] In Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, this Court confirmed that, in the absence of specific legislation, the proper test in determining whether to enforce a forum selection clause is discretionary in nature. It provides that unless there is a “strong cause” as to why a domestic court should exercise jurisdiction, order and fairness are better achieved when parties are held to their bargains.
As also explained in Momentous.ca, where a court or tribunal has exclusive jurisdiction, the parties are unable to use a forum selection clause, or other agreement, to oust that jurisdiction in favour of another forum. This principle ensures that legislatively mandated forums maintain authority over specific subject matters, safeguarding both the integrity of the adjudicative process and the public policy objectives underlying the statutory scheme.
[7] ... when another forum ― an arbitration panel, a tribunal or another court ― has the exclusive jurisdiction to deal with the claim, the Ontario Superior Court of Justice will not take jurisdiction, based upon agreement or statute.
Conclusion
A carefully drafted forum selection clause may serve as a powerful tool for securing predictability and efficiency in dispute resolution by channeling litigation to a chosen jurisdiction. These clauses reinforce the principle of attornment, whether explicit or implicit, by ensuring that litigants commit to a particular court or tribunal, thereby reducing uncertainty and jurisdictional disputes. Still, such provisions must be balanced against overriding public policy considerations, statutory exclusivity, or consumer protection principles, that may justify a court declining to enforce a forum selection clause.