Most contracts contain a forum selection clause. Such a clause allows contracting parties, in the event of a dispute, to “agree in advance to submit to the jurisdiction of a given court . . . .” Nat’l Equip. Rental Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1964).
A forum selection clause may be permissive, meaning that the clause constitutes “nothing more than a consent to jurisdiction and venue in the named forum [but] not exlcud[ing] jurisdiction or venue in any other forum.” Garcia Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d 273, 274-75 (Fla. 1987). Or, the clause may be mandatory, meaning that the clause provides “for a mandatory and exclusive place for future litigation.” Id. at 274.
If a dispute arises relating to the contract, and a lawsuit is filed, then the forum selection clause comes into play. Many times, disagreements arise on whether the clause is permissive or mandatory. One such dispute was recently addressed by Florida’s Third District Court of Appeal in EcoVirux, LLC v. BioPledge, LLC.
In EcoVirux, the forum selection clause stated that the “exclusive venues” for any dispute relating to the contract “may be brought” in state and federal courts of Denton County, Texas. By using the words “exclusive” and “may be brought,” the clause contained both exclusivity language and permissive language.
Naturally, a contract dispute occurred, and the complaint was filed, not in Denton County, but in Miami-Dade County, Florida. On appeal, the Third DCA held that the forum selection clause was mandatory, and suit must be filed in Denton County.
The Court reasoned that “[c]lauses containing language of exclusivity are construed as mandatory.” As the clause at issue contained exclusivity language, the clause was mandatory.
Regarding the “may be brought” language, the Court stated that the language did not relate to the forum but instead to whether a party elected to file suit. In other words, an aggrieved party may or may not choose to file suit. If a suit was filed, however, the suit must be filed in Denton County.
Interestingly, the party arguing for forum in Miami-Dade County claimed that extrinsic evidence would prove the forum selection clause was permissive. The Court rejected the use of extrinsic evidence, holding that extrinsic evidence could not be used because the forum selection clause was unambiguous.
The EcoVirux case provides a good example for contracting parties who want to include a forum selection clause in their contract.
Jonathan Taylor is an associate attorney with The Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Taylor concentrates in the areas of Florida tax appeals and general administrative appeals. Mr. Taylor also volunteers with Guardian ad Litem to handle appellate matters. Mr. Taylor can be reached at 954-234-2884 or firstname.lastname@example.org.