The enforceability of forum-selection clauses is one of the most litigated jurisdictional issues in federal district courts. In a globalized society, forum-selection clauses reduce uncertainty. However, they present unique problems and, although they are liberally enforced by state and federal courts, forum-selection clauses are not always enforced by the forum court. Enforcement of forum-selection clauses is especially complex in diversity actions in federal court.
Forum-selection clauses appear substantive and often have substantive effects; however, they operate procedurally. Federal courts unanimously hold that the validity of a forum-selection clause is a procedural question and therefore the question of validity is decided by federal law. However, federal courts were not always unanimous on this issue, and a minority once held that the validity of a forum-selection clause should be decided by state law because it is a contracts issue.
This note argues that the former minority view reached the correct conclusion, but for the wrong reasons. In support of this argument, the note provides a background on the applicable law and the development of the Erie doctrine, the evolution of forum-selection clauses and their treatment in federal diversity cases, and the controversy over Erie's application to forum-selection clauses which are the result of flawed legal conclusions by courts and legal scholars at almost every state in the analysis. The note concludes that adherence to the Erie doctrine requires that state rather than federal law should determine the enforceability of forum-selection clauses, despite being an issue of procedure because of their special relationship to the substantive rights inherent in contracts.
James C. McNeal,
Civil Procedure and Contract Law—Contractual Forum-Selection Clauses in Erie Cases: More than Substance or Procedure,
34 U. Ark. Little Rock L. Rev. 439
Available at: http://lawrepository.ualr.edu/lawreview/vol34/iss2/7