Forum selection clause: choosing the court in a US contract

Sample clause

Written for a software licence between Brandywine Data, a fictional Delaware software licensor, and a Texas logistics customer.

Forum Selection. (a) Any action or proceeding arising out of or relating to this Agreement must be brought exclusively in the state courts located in New Castle County, Delaware, or the United States District Court for the District of Delaware. (b) Each party irrevocably consents to the personal jurisdiction of those courts and waives any objection to venue in them, including any objection that they are an inconvenient forum. (c) Despite paragraph (a), either party may seek a temporary restraining order or preliminary injunction in any court of competent jurisdiction to protect its confidential information or intellectual property. (d) A final judgment in any action brought under this Section may be enforced in any court with jurisdiction over the party against whom it is given.

Sample wording, not legal advice.

Variants

What to negotiate

• Enforcement after Atlantic Marine

  In Atlantic Marine Construction Co. v. U.S. District Court, decided in 2013, the Supreme Court held that a valid forum selection clause should be given controlling weight in all but the most exceptional cases, and enforced through a transfer to the chosen federal court. That builds on The Bremen v. Zapata Off-Shore, decided in 1972, which held such clauses presumptively valid. A party resisting a clause faces a heavy burden.

• State statutes that void out of state forums

  Some states protect local parties from distant forums by statute. Construction contracts for projects in a state often cannot require disputes to be heard elsewhere, under the laws of a number of states, and California Labor Code section 925 restricts requiring California employees to litigate outside California. Atlantic Marine itself arose from a construction subcontract, so even where a statute exists, federal procedure may affect the result. Check the law of the state where the work is done.

• Consumer contracts

  In Carnival Cruise Lines v. Shute, decided in 1991, the Supreme Court enforced a forum clause printed on a cruise ticket, subject to fundamental fairness. Consumer protection laws in some states, and arbitration rules, may still limit forum clauses against consumers, and a clause chosen to discourage claims may be challenged. Consumer facing businesses should choose a reasonable forum and consider small claims carve outs.

The risk of leaving it out

Without a forum selection clause, a dispute can be brought wherever a court has jurisdiction over the defendant, which may mean litigating in the other party's home state. Parallel cases in two states are possible, with arguments about which goes first. A clear clause avoids a dispute about where to have the dispute.

Exclusive and permissive clauses

An exclusive or mandatory clause requires disputes to be brought only in the named court and is usually enforced by dismissing or transferring cases filed elsewhere. A permissive clause only confirms the named court can hear the case and that the parties consent to it, without barring other courts. Courts read a clause as permissive unless the language clearly makes it exclusive, using words such as exclusive, only or must. The sample uses exclusively and adds a waiver of venue objections. Law checked on 21 October 2026. This page explains how the clause works and is not legal advice.

Forum and governing law

Forum selection decides where a dispute is heard; a governing law clause decides which law applies. They are often aligned, as Delaware courts applying Delaware law, but need not be. Some states that void out of state forums for certain contracts also void out of state governing law, so both clauses should be checked against the same statutes. The governing law clause page covers that choice.

Forum selection and arbitration

An arbitration clause sends disputes to arbitration instead of court, and the Federal Arbitration Act gives it strong protection. Where a contract has both, the forum selection clause usually governs court proceedings that remain, such as actions to compel arbitration or enforce awards, and urgent injunctions. Make sure the two clauses do not contradict each other.

Outside the United States

Australian and English contracts use exclusive or non exclusive jurisdiction clauses for the same purpose. Courts there also usually enforce exclusive jurisdiction clauses, staying proceedings brought elsewhere unless there are strong reasons not to. The jurisdiction clause page covers the Australian approach, and international contracts may also involve the Hague Convention on Choice of Court Agreements.

Documents that carry this clause

Master services agreementA data consultancy and an insurer sign this once and then buy work under it for three years. It is the rare contract whose whole purpose is to make the next twenty contracts short.Software licence agreement template with seats, term and supportA software licence agreement has to answer three questions before anything else: what a seat is, what happens when the software is down, and who gets the data at the end. This one licenses a hosted practice management suite to a medical practice for 25 named users at $9,600 a year, with a support table, uptime credits and a 30 day export.Distribution agreement template with territory and targetsAn exclusive distribution agreement is a trade: a territory in exchange for volume. This one appoints a New Zealand distributor for a skincare range at 48 per cent of recommended retail, with purchase targets rising from NZD 240,000 to NZD 420,000 across three years, and exclusivity that converts to non exclusive if a target is missed by more than 15 per cent.

Questions people ask