There should be consequences for breaching mandatory forum selection clauses

19 Oct 22

Professor Tanya J. Monestier, in a thought-provoking piece entitled, Damages for Breach of a Forum Selection Clause, 59 Am. Bus. J. (2020), quite ably goes through the incentives for those inclined to breach mandatory forum selection clauses, and how little some courts do to redress the harm caused by such breach. Protracting litigation, erecting hurdles and forum shopping are obvious motivators. "The goal," the professor writes, is "placing strategic obstacles in the way of one’s opponent right from the beginning. The non-breaching party may decide that the light is simply not worth the candle and proceed in the non-designated forum ...."

Agreeing to a forum selection clause is an agreement not to sue in other forums. Like any other agreement, if breach causes harm, compensation should be mandatory. “If damages are not awarded for breaching a forum selection clause—for specifically doing what one promised not to do—the promise is an illusory one that can be breached with no legal consequences.”

In a query entitled, There should be consequences for breach of a mandatory forum selection clause, the lawyers of Redline exchange clauses and debate strategies for overcoming specific performance and American Rule obstacles, so that bad actors who roll the dice are forced to remediate the harm caused by breaching forum selection clauses.


(The intended audience for this post is licensed and practicing lawyers, not laypersons seeking legal advice for their situation. If you are not a lawyer, hire one before using or relying on any information contained here.)