Governing Law on Forum-Selection Agreements
27 Pages Posted: 23 Jun 2014 Last revised: 14 Sep 2014
Date Written: September 13, 2014
The judicial task of fixing on the proper law to govern a contractual choice-of-forum clause comprises an enigma. The key to its solution lies at the very heart of the subject, where one encounters its most celebrated riddle: Which law governs when the parties have also agreed to a choice-of-law clause, that is, does one first test the forum-selection clause under the law of the seised forum or does one first look at the parties’ choice of law to apply the chosen law to the forum-selection clause?
This chicken-or-egg mystery throws courts into contortions. Prior commentators opt for the chosen law. But differentiated cases, policy arguments, and doctrinal consistency all support applying lex fori to enforceability of the forum-selection agreement — while applying the chosen law as to the agreement’s interpretation or, in the absence of a choice-of-law clause, the chosen court’s law.
Keywords: Forum-selection, choice of law
JEL Classification: K12, K33, K41
Suggested Citation: Suggested Citation