Saturday, June 13, 2009

FORUM SELECTION CLAUSE ENFORCED BY MANDAMUS: In re International Profit Assoc. Inc. (Tex. 2009)

TEXAS SUPREME COURT GRANTS PETITION FOR MANDAMUS TO ENFORCE CONTRACTUAL FORUM-SELECTION CLAUSE

In re Int'l Profit Associates, Inc. (Tex. 2009)
No. 08-0531 (Tex. Jun. 12, 2009) (per curiam) (
mandamus granted to enforce forum selection and choice-of-law clause) (methods to challenge forum selection clauses) (enforceability of forum selection clause) (sufficiency of disclosure of contractual terms)

FROM THE PER CURIAM OPINION:

In a recent case also involving IPA and the enforceability of a forum-selection clause, we explained that, as a general rule, forum-selection clauses are enforceable, and the party challenging the forum-selection clause bears a heavy burden of proof. In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 675 (Tex. 2009) (citing In re Lyon, 257 S.W.3d at 231–32).

A trial court abuses its discretion in refusing to enforce the forum-selection clause, unless the party opposing enforcement of the clause can clearly show that: (1) enforcement would be unreasonable or unjust, (2) the clause is invalid for reasons of fraud or overreaching, (3) enforcement would contravene a strong public policy of the forum where the suit was brought, or (4) the selected forum would be seriously inconvenient for trial. Id. Applying this standard to the present case, we conclude that the trial court clearly abused its discretion by placing the burden of proof on IPA to demonstrate that it showed the forum-selection clause to Riddell.
* * *
[T]he party challenging a forum-selection clause has the burden of proving the clause is invalid, and the party seeking to enforce the forum-selection clause is not obligated to prove that it specifically showed the clause to the opposing party as a condition of enforcement. Because the trial court placed the burden of proof on IPA and required the company to prove that it showed the forum-selection clause to Riddell, it clearly abused its discretion in denying IPA’s motion to dismiss. Accordingly, we conditionally grant mandamus relief and direct the trial court to vacate its order denying IPA’s motion to dismiss and enter an order granting the motion.

IN RE INTERNATIONAL PROFIT ASSOCIATES, INC., INTEGRATED BUSINESS ANALYSIS, INC., ACCOUNTANCY ASSOCIATES, LLC., INTERNATIONAL TAX ADVISORS, INC., AND HUEY MITCHELL, JR.; from Dallas County; 5th district (05-08-00809-CV, ___ SW3d ___, 06-30-08)stay order issued March 11, 2009, lifted
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus.Per Curiam Opinion
Per Curiam Opinion [
pdf version of opinion on Supreme Court's website]

RELATED CONCEPTS: ENFORCEABILITY OF CONTRACTS, WAIVERS: conspicuousness requirement, knowing waiver of right to jury trial Jury waiver enforceability of arbitration agreement CONTRACT FORMATION AND ENFORCEABILITY: party has duty to read what he signs

1 comment:

Andrew said...

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___________________
Andrew
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