California
How Atlantic Marine Construction Co. v. U.S. District Court applies in California: state-specific rules, key cases, and bar exam notes for Other.
California courts follow the principles laid out in Atlantic Marine regarding enforcement of forum selection clauses, giving deference to clauses that are accessed willingly by sophisticated parties, as long as they are not unjust or unreasonable. California courts also factor in California's public policies when considering these clauses.
California courts enforce valid forum selection clauses unless there is a strong showing that enforcement would be unreasonable or unjust, or that the clause is invalid for reasons such as fraud or overreaching.
California courts reasoned that a forum selection clause can be deemed unenforceable if it contravenes California's strong public policy.
While a federal case, this decision is influential in California, reinforcing the principle that forum selection clauses are enforceable unless circumstances dictate otherwise.
The court reaffirmed that California law favors the enforcement of forum selection clauses applicable when the parties have negotiated and agreed upon them in a commercial context.
Like the federal standard set by the U.S. Supreme Court, California tends to enforce forum selection clauses but is more inclined to scrutinize these clauses for adherence to state public policy considerations. Unlike some federal courts, California may be more receptive to arguments against enforcement based on equity and public interest.
Understanding the enforceability of forum selection clauses is vital for California bar exam takers, reflecting both federal and state principles. Expect questions on public policy implications in contract enforcement.