Tennessee Court of Appeals Confirms that Forum Selection Clauses are Enforceable in Tennessee Contracts.

The Tennessee Court of Appeals recently discussed forum selection clauses found in contracts.  These are clauses that select the jurisdiction and court that will handle any disputes involving the contract.  The case of The Cohn Law Firm v. YP Southeast Advertising & Publishing, LLC, 2015 WL 3883242 (Tenn. Ct. App. 2015) involved a dispute between a plaintiff attorney law firm and an advertising company.  The plaintiff’s attorney sued the advertising company in Shelby County Chancery Court over the dispute.  The defendant advertising company filed a Motion to Dismiss alleging that this jurisdiction was inappropriate due to a forum selection clause in the contract.  The contract between the plaintiff’s attorney law firm and the defendant provided that any lawsuit pertaining to the agreement should only be filed in the United States District Court for the Northern District of Georgia or the Superior Court of Dekalb County, Georgia. (The Cohn Law Firm at 2).  This contract was signed by the plaintiff attorney.

The Tennessee Court of Appeals found that generally forum selection clauses are “enforceable and binding on the parties entering the contract.”  (The Cohn Law Firm at 4).  Further, “a forum selection clause will be upheld if it is fair and reasonable in light of all the circumstances surrounding its origin and application.  A party seeking to invalidate a forum selection clause must prove that the clause resulted from misrepresentation, duress, abuse of economic power, or other unconscionable means.”  (The Cohn Law Firm at 4).  Tennessee law is also clear that “the party challenging the enforcement of the forum selection clause should bear a heavy burden of proof.”  (The Cohn Law Firm at 4). 

The forum selection clause that was present in this case was as follows:

18. Miscellaneous; Exclusive Venue. This Agreement and all claims and disputes arising under or relating to this Agreement will be governed by and construed in accordance with the laws of the State of Georgia, without giving effect to its conflicts of laws principles. Any action or proceeding arising under or relating to this Agreement shall be filed only in the United States District Court for the Northern District of Georgia or the Superior Court of DeKalb County, Georgia. Advertiser hereby consents and submits to the exclusive jurisdiction and venue of those courts and waives any objection based on the convenience of these exclusive venues.... If any provision of this Agreement is deemed unlawful, void, or for any reason unenforceable, then that provision shall be deemed severable from this Agreement and shall not affect the validity and enforceability of any remaining provisions.

The Tennessee Court of Appeals ultimately upheld the enforceability of this clause. (The Cohn Law Firm at 12).  The court looked at several other issues pertaining to the enforceability of this clause, but for the purpose of this post, the court reaffirmed the general enforceability of a forum selection clause.  These are very important clauses that should be included in the drafting of many Tennessee contracts.  I highly recommend the use of these kinds of clauses in order to protect the interests of the parties to the contract.