Mark Pestronk
Q: I have been developing a disclaimer for my travel business. One of the clauses that I would like to have is an exclusive-forum clause, which would state that all litigation must be brought only in my hometown, regardless of where the client lives. The idea is that making suits difficult to pursue would tend to deter litigation in the first place. My local lawyer thinks I would have trouble getting courts in other states to enforce the clause. The lawyer says that, if a client sued in his home city, the court there would ignore my clause and let the case proceed. Do you agree?
A: If you draft and present the exclusive-forum clause correctly, courts in every state should uphold your clause. In other words, if you move to dismiss a case brought elsewhere, the court should grant your motion.
Exclusive-forum clauses have to pass a four-part test. First, they must be "reasonably communicated" to the client. For example, you can email your disclaimer to the client and get some proof that the client received it. If you are a tour operator or wholesaler doing business with retail travel agencies, then emailing it to the travel advisor who made the booking will be sufficient, as the advisor is legally an agent for the client.
Of course, it would be better to get a signature from the client agreeing to the terms of the disclaimer. If a signature is impractical, then ask for a return email indicating agreement or at least acknowledging receipt.
On the other hand, merely posting your disclaimer on your website under "terms of use" or the like is insufficient because you have not "communicated" it to the client at all. I realize that some travel suppliers do no more than this, but they are running the risk of courts refusing to uphold the disclaimer.
Some experts recommend that you put the exclusive-forum clause in bold, and some suggest that it is necessary to put a notice about the clause at the beginning of your disclaimer. According to my research, these steps are not necessary, but they certainly would not hurt.
Second, you need to ensure that the exclusive-forum clause is mandatory, not permissive. If you merely state, "Client consents to the jurisdiction of the courts in X city," you have not excluded the client from suing in his home city if he chooses.
Third, trial in the selected forum must not be "so difficult and inconvenient that the plaintiff effectively will be deprived of his day in court." Since courts have recently upheld clauses requiring suits in England and France, it probably follows that litigating in your hometown would not be "difficult and inconvenient."
Fourth, the law to be applied in your court must not be fundamentally unfair. For example, if your clause stated that all litigation must be in Mexico, the clause would probably not be enforced in an injury case because Mexican law severely limits damages.
For a sample exclusive-forum clause, see my sample disclaimers at www.pestronk.com/resources.