News & Insights

Contracts – Forum-Selection Clauses

By Paul Evelius

In Atlantic Marine Construction Company v. U.S. District Court for the Western District of Texas, the Supreme Court has strongly endorsed contractual forum-selection clauses. The clause at issue in Atlantic Marine stated that all disputes between the parties to a construction subcontract would be litigated in Virginia. After a dispute arose, the subcontractor filed suit in a federal court in Texas and the prime contractor, citing the forum-selection clause, moved to transfer the case to Virginia. The Supreme Court concluded that the motion should have been granted, stating that “[w]hen parties have contracted in advance to litigate disputes in a particular forum, courts should not unnecessarily disrupt the parties’ expectations” and that “[i]n all but the most unusual cases, … the ‘interest of justice’ is served by holding parties to their bargain.”