Will Idaho enforce this clause requiring disputes to be litigated or arbitrated in another state's courts?
No, if enforcing it would restrict a party from enforcing its rights in Idaho tribunals or would require the dispute to be resolved outside Idaho. Idaho Code § 29-110(1): "Every stipulation or condition in a contract, by which any party thereto is restricted from enforcing his rights under the contract in Idaho tribunals, or which limits the time within which he may thus enforce his rights, is void as it is against the public policy of Idaho. Nothing in this section shall affect contract provisions relating to arbitration so long as the contract does not require arbitration to be conducted outside the state of Idaho." Idaho courts apply this as a real, litigated bar on out-of-state forum and arbitration-situs clauses, not a dead letter: T3 Enterprises, Inc. v. Safeguard Business Systems, Inc. held that "because enforcement of the parties' Dallas forum selection clause would contravene the strong public policy articulated in Idaho Code section 29-110(1), the forum selection clause is unenforceable under Texas law": applying § 29-110(1)'s public policy even though the CONTRACT chose Texas law to govern. Off-Spec Solutions, LLC v. Transportation Investors LLC reached the same result applying California's own conflicts rule that a forum clause is unenforceable if it would contravene a strong public policy of the forum where suit is brought: "we hold that Idaho Code section 29-110(1) constitutes a strong public policy that is sufficient to invalidate the forum selection clauses," and "the parties cannot simply 'choose' to apply the law of another state to avoid" it. Note what survived there: the law, not the forum. Off-Spec affirmed a ruling that the claims "must be arbitrated in Idaho utilizing California law", so § 29-110(1) moved the seat of the dispute without displacing the chosen law.
The trap
§ 29-110(1)'s arbitration carve-out cuts BOTH ways and is easy to misread: the section does not touch an arbitration clause as such, but it does void an arbitration clause that requires the arbitration itself to happen outside Idaho, so a clause requiring arbitration in Dallas is caught by the statute even though a bare promise to arbitrate is not. Do not assume a foreign CHOICE-OF-LAW clause insulates an out-of-state forum or arbitration-situs clause from § 29-110(1): T3 Enterprises applied Idaho's public policy under the chosen state's OWN conflicts doctrine (Texas law asks whether enforcement would contravene a strong public policy of the forum where suit is brought), so picking another state's law to govern the contract does not by itself avoid the Idaho statute if suit ends up brought in Idaho. Frizzell v. DeYoung (2018) is a reminder the statute reaches more than forum-selection clauses on their face: citing § 29-110, the Court held that "to the extent the TEDRA agreement purported to hold Edwin harmless for claims of future negligence and breaches of fiduciary duty, such portions of the agreement are void as against public policy," and it reversed the dismissal of the complaint. This rule's statute is distinct from the FRANCHISE-specific venue and choice-of-law rule in § 29-110(2), which by its own terms reaches only a franchise agreement "entered into or renewed on or after July 1, 2003" by a person who was then an Idaho resident or an entity "incorporated or organized under the laws of this state."
9 authorities
- statuteIdaho Code § 29-110enactment date not established
The words that state the rule
Every stipulation or condition in a contract, by which any party thereto is restricted from enforcing his rights under the contract in Idaho tribunals, or which limits the time within which he may thus enforce his rights, is void as it is against the public policy of Idaho. Nothing in this section shall affect contract provisions relating to arbitration so long as the contract does not require arbitration to be conducted outside the state of Idaho.
- case435 P.3d 518T3 Enters., Inc. v. Safeguard Bus. Sys., Inc.Idahodecided 2019read it at the source ↗
The words that state the rule
In sum, because enforcement of the parties' Dallas forum selection clause would contravene the strong public policy articulated in Idaho Code section 29-110(1), the forum selection clause is unenforceable under Texas law.
- case435 P.3d 518T3 Enters., Inc. v. Safeguard Bus. Sys., Inc.Idahodecided 2019read it at the source ↗
The words that state the rule
The parties' selection of Texas law is precisely why Section 29-110(1) was considered by the district court. As analyzed above, Texas law considers the public policy of the forum where suit is brought to determine if a forum selection clause is enforceable. In re Lyon Fin. Servs., Inc. , 257 S.W.3d at 231 -32 . Here, T3 brought suit in Idaho.
- caseNo. 47940 (Idaho May 19, 2021)Off-Spec Solutions LLC v. Transportation Investors LLCIdahodecided 2021
The words that state the rule
Therefore, we hold that Idaho Code section 29-110(1) constitutes a strong public policy that is sufficient to invalidate the forum selection clauses in the purchase agreement and the LLC agreement.
- caseNo. 47940 (Idaho May 19, 2021)Off-Spec Solutions LLC v. Transportation Investors LLCIdahodecided 2021
The words that state the rule
First, the parties cannot simply “choose” to apply the law of another state to avoid the strong public policy articulated in Idaho Code section 29-110(1).
- caseNo. 47940 (Idaho May 19, 2021)Off-Spec Solutions LLC v. Transportation Investors LLCIdahodecided 2021
The words that state the rule
Based on the foregoing, we affirm the district court’s ruling that claims arising from the purchase agreement and the LLC agreement must be arbitrated in Idaho utilizing California law.
- caseNo. 44975 (Idaho Apr. 4, 2018)Frizzell v. DeYoungIdahodecided 2018
The words that state the rule
In this case, to the extent the TEDRA agreement purported to hold Edwin harmless for claims of future negligence and breaches of fiduciary duty, such portions of the agreement are void as against public policy.
- caseNo. 44975 (Idaho Apr. 4, 2018)Frizzell v. DeYoungIdahodecided 2018
The words that state the rule
We reverse the district court’s dismissal of Frizzell’s complaint and remand for proceedings consistent with this opinion. No costs or attorney fees at this time on appeal.
- statuteIdaho Code § 29-110enactment date not established
The words that state the rule
Any condition, stipulation or provision in a franchise agreement is void to the extent it purports to waive, or has the effect of waiving, venue or jurisdiction of the state of Idaho’s court system. Any condition, stipulation or provision in a franchise agreement, to the extent it purports to assert, or has the effect of asserting, the choice of law is enforceable. This subsection shall apply to any franchise agreement entered into or renewed on or after July 1, 2003, by any person who at the time of entering into or renewing such franchise agreement was a resident of this state or incorporated or organized under the laws of this state.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.