Cruise Contracts, Public Policy, and Foreign Forum Selection Clauses

30 Pages Posted: 25 Sep 2020 Last revised: 21 Jun 2021

See all articles by John F. Coyle

John F. Coyle

University of North Carolina School of Law

Date Written: September 9, 2020

Abstract

A cruise ship contract is the prototypical contract of adhesion. The passenger is presented with the contract on a take-it-or-leave-it basis. If she refuses to sign, the ship sails without her. To ensure that cruise companies do not draft one-sided contracts that are unfair to passengers, Congress has enacted a number of statutes that regulate these agreements. One such statute is 46 U.S.C. § 30509. This law stipulates that any contract provision that limits the liability of the cruise company for personal injury or death is void as against public policy if the ship stops at a U.S. port.

In recent years, cruise companies have sought to develop a workaround to this rule for non-U.S. residents. The workaround involves (1) a foreign forum selection clause, and (2) a foreign choice-of-law clause. When a suit is filed against the cruise company in U.S. court, the company will invoke the foreign forum selection clause and ask for the case to be dismissed. When the case is refiled in the foreign court, the cruise company will then argue that the choice-of-law clause compels the application of the Athens Convention, an international treaty that caps the liability of cruise companies in negligence cases. In this way, the companies seek to use forum selection clauses and choice-of-law clauses in tandem to achieve a goal—limting their tort liability to passengers via contract—that would ordinarily be prohibited by 46 U.S.C. § 30509.

This workaround should not work. Indeed, there are dozens of cases where U.S. courts have refused to enforce forum selection clauses in analogous situations. In 2012, however, the U.S. Court of Appeals for the Eleventh Circuit expressly blessed the use of the workaround in cruise ship contracts. This Article first critiques this Eleventh Circuit decision and identifies its many shortcomings. It then draws upon analogous cases from other areas of U.S. law to propose a new analytical framework for evaluating when the courts should and should not enforce foreign forum selection clauses in cruise ship contracts.

Keywords: Conflict of Laws, Contracts, Private International Law, Forum Selection Clauses, Eleventh Circuit, Cruise Ships, the Bremen, Carnival Cruise

Suggested Citation

Coyle, John F., Cruise Contracts, Public Policy, and Foreign Forum Selection Clauses (September 9, 2020). 75 University of Miami Law Review 1087 (2021), UNC Legal Studies Research Paper , Available at SSRN: https://ssrn.com/abstract=3689903 or http://dx.doi.org/10.2139/ssrn.3689903

John F. Coyle (Contact Author)

University of North Carolina School of Law ( email )

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Chapel Hill, NC 27599-3380
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919-843-9634 (Phone)

HOME PAGE: http://www.law.unc.edu/faculty/directory/coylejohnf/

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