Mark Pestronk
Q: My agency has sold tours and cruises operated by foreign companies. I recently noticed that many of the operators and all the cruise lines have fine-print terms and conditions that require that all suits be brought in their home country. Are these clauses enforceable against American consumers? If they are, can I have a clause in my standard disclaimer requiring that all suits against my agency be brought only in the courts of my city or county?
A: These kinds of clauses are enforceable under all the court decisions that I have found in my research. However, you have to communicate the existence of the clause by giving it prominence in your disclaimer.
Civil-procedure law, which encompasses issues of jurisdiction, is different in each state so it is impossible to say with absolute certainty what the decision of all courts therein would be. It is only possible to state the general rules and any known exceptions.
In addition to state law, separate federal law has been laid down by the U.S. Supreme Court. Although the Supreme Court's travel precedent dealt with exclusive jurisdiction in Miami, the principles can also be applied to foreign cities. In the 1991 case of Carnival Cruise Lines v. Shute, it stated that exclusive-forum clauses, even those designating other countries, should be given controlling weight in all but the most exceptional cases.
Under both federal and state precedents, whether an exceptional case applies seems to depend on whether the clause was reasonably communicated to the party resisting enforcement; whether the clause is mandatory or permissive, i.e. whether the parties are required to bring any dispute to the designated forum or simply permitted to do so; and whether the claims and parties involved in the suit are subject to the forum-selection clause.
So if the forum clause was communicated to the resisting party, has mandatory force as the exclusive forum and covers the claims and parties involved in the dispute, it is probably enforceable. A party can overcome this presumption only by making a sufficiently strong showing that enforcement would be "unreasonable" or "unjust."
I could find no case in which a mandatory foreign forum was deemed either. U.S. federal courts had no problem dismissing cases against Costa that should have been brought only in Genoa, Italy, under the exclusive-forum clause in the cruise ticket.
At some point a court will probably find that requiring a suit in some developing country's courts would be unreasonable or unjust, but I have yet to find such a precedent. If anyone knows of a such case, please make me aware of it.
It certainly follows that if a court will uphold Genoa, your clause requiring that suits be brought only in your home city or county should certainly be enforceable. It should make no difference whether your disclaimer is for tour operations or retail travel service.
In the travel business, the "reasonably communicated" criterion is quite important as clients often claim that they never saw or read any such clauses. The best practice would be to take the following steps.
First, make clear that your entire disclaimer is a contract by calling it an "agreement" between the client and your agency. Second, place the clause in bold font or upper case or both. Third, try to obtain written proof that the client agreed to the terms of your disclaimer, either by signature or a return email. For online sales put the clause in proximity to an "I agree" button and record the user's IP address. You can find a sample of such a disclaimer at www.pestronk.com/free.html. Click on "Disclaimer for Client's Signature."