Will a Kansas court honour our clause sending disputes to another state's courts?
Yes, where the clause is fair and its words are mandatory. Vanier set out two sources rather than announcing a test of its own. The first is The Bremen v. Zapata Off-Shore Co., where the Supreme Court of the United States "concluded the forum-selection clause should have been enforced unless Zapata could clearly show" that "enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." The second is its own earlier decision in National Equipment Rental v. Taylor, where it "found the transaction bore a reasonable relationship to New York" and said the parties "had the right to agree that New York would be the forum for determining any disputes arising out of the contract." In Vanier v. Ponsoldt the Supreme Court enforced a clause designating the seller's county: "We find the forum-selection clause fair and reasonable. The forum selected is the home of one of the parties to the contract and, thus, has a reasonable relationship to the transaction. We hold Ponsoldt voluntarily consented to personal jurisdiction in Saline County, Kansas, by entering into the installment purchase and security agreement with Vanier." The wording then decides whether the clause is exclusive. In Thompson v. Founders Group International, Inc. the Court of Appeals held a clause saying that any action brought pursuant to the agreement "shall properly lie" in two named Florida courts to be permissive: "When the language used in the present clause is given its plain meaning, the clause is permissive and does not prevent Thompson from bringing this action in Kansas. This interpretation does not render the clause meaningless."
The trap
Drafting is the whole battle. A clause that merely says an action may be brought, or would properly lie, in the chosen court gives that court jurisdiction without taking it away anywhere else; the Vanier clause that was enforced said venue "shall lie only" in the seller's state and county. What will NOT defeat a clause: Ponsoldt "does not claim the forum-selection clause was entered into due to fraud or overreaching" and argued instead that he "did not read the agreement" and that the clause was "[b]uried in the mass of type on Page 4", and the Court answered that "it is the duty of every contracting party to learn and know the contents of a contract before signing it." For four kinds of contract, however, no clause works at all: K.S.A. 16-121(e) provides that notwithstanding any contractual provision to the contrary, any litigation, arbitration or other dispute resolution proceeding arising from a contract to be performed in Kansas shall be conducted in Kansas, and a conflicting provision is void and unenforceable: "contract" there being any construction contract, motor carrier transportation contract, dealer agreement or franchise agreement. And for a claim under the private construction act, K.S.A. 16-1806 fixes venue in the county where the real property is located and requires an arbitration hearing to be held there too.
14 authorities
The words that state the rule
Ponsoldt does not claim the forum-selection clause was entered into due to fraud or overreaching. Instead, Ponsoldt contends he did not read the agreement and that the clause was “[b]uried in the mass of type on Page 4.” Although Ponsoldt was new to the horse trading business, he was an experienced and astute businessman. In Kentucky, one who can read and has an opportunity to read a contract he signs must abide by the terms of the contract. Murphy v. Torstrick, 309 S.W.2d 767, 770 (Ky. 1958). Furthermore, it is the duty of every contracting party to learn and know the contents of a contract before signing it. Commercial Credit Corporation v. Harris, 212 Kan. 310, 314 , 510 P.2d 1322 (1973). We find the forum-selection clause fair and reasonable. The forum selected is the home of one of the parties to the contract and, thus, has a reasonable relationship to the transaction. We hold Ponsoldt voluntarily consented to personal jurisdiction in Saline County, Kansas, by entering into the installment purchase and security agreement with Vanier.
- case886 P.2d 904Thompson v. Founders Group International, Inc.Kan. Ct. App.decided 1994read it at the source ↗
The words that state the rule
When the language used in the present clause is given its plain meaning, the clause is permissive and does not prevent Thompson from bringing this action in Kansas. This interpretation does not render the clause meaningless. As in Utah Pizza Service, the clause secures the franchiser’s right to sue the franchisees in the franchiser’s forum of choice.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
Any litigation, arbitration or other dispute resolution proceeding arising from such contract shall be conducted in this state. Any provision, covenant or clause in such contract that conflicts with the provisions of this subsection shall be void and unenforceable.
- statuteK.S.A. 16-1806enactment date not established
The words that state the rule
Venue of such an action shall be in the county where the real property is located. The hearing in such an arbitration shall be held in the county where the real property is located.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
(e) Notwithstanding any contractual provision to the contrary, the laws of the state of Kansas shall apply to and govern every contract to be performed in this state.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
"Contract" means any construction contract, motor carrier transportation contract, dealer agreement or franchise agreement.
The words that state the rule
At the option of Seller, jurisdiction and venue for any dispute arising under or in relation to this contract shall lie only in the Seller’s state and county as set forth in paragraph 1 above [Saline County, Kansas].
- case886 P.2d 904Thompson v. Founders Group International, Inc.Kan. Ct. App.decided 1994read it at the source ↗
The words that state the rule
The forum-selection clause states “any action brought pursuant to this Agreement . . . shall properly lie” in either of the two named Florida courts.
The words that state the rule
The Court concluded the forum-selection clause should have been enforced unless Zapata could clearly show “enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.” 407 U.S. at 15 .
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
(1) "Construction contract" means an agreement for the design, construction, alteration, renovation, repair or maintenance of a building, structure, highway, road, bridge, water line, sewer line, oil line, gas line, appurtenance or other improvement to real property, including any moving, demolition or excavation, except that no deed, lease, easement, license or other instrument granting an interest in or the right to possess property shall be deemed to be a construction contract even if the instrument includes the right to design, construct, alter, renovate, repair or maintain improvements on such real property. "Construction contract" shall not include any design, construction, alteration, renovation, repair or maintenance of: (A) Dirt or gravel roads used to access oil and gas wells and associated facilities; or (B) oil flow lines or gas gathering lines used in association with the transportation of production from oil and gas wells from the wellhead to oil storage facilities or gas transmission lines.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
(4) "Dealership agreement" means an oral or written agreement of definite or indefinite duration between an equipment manufacturer or service provider and an equipment or service dealer which provides for the rights and obligations of the parties with respect to the purchase or sale of such equipment or services.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
(5) "Franchise agreement" means any contract or franchise or any other terminology used to describe the contractual relationship between manufacturers, distributors and dealers, by which: (A) A right is granted one party to engage in the business of offering, selling or otherwise distributing goods or services under a marketing plan or system prescribed in substantial part by the other party, and in which there is a community of interest in the marketing of goods or services at wholesale or retail, by lease, agreement or otherwise; and (B) the operation of the grantee's business pursuant to such agreement is substantially associated with the grantor's trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the grantor or an affiliate of the grantor.
- statuteK.S.A. 16-121enactment date not established
The words that state the rule
(7) "Motor carrier transportation contract" means, with respect to a motor carrier as defined in 49 C.F.R. § 390.5, as in effect on July 1, 2017, or any later version as established in rules and regulations adopted by the state corporation commission, a contract, agreement or understanding covering: (A) The transportation of property by a motor carrier; (B) the entrance on property by the motor carrier for the purpose of loading, unloading or transporting property; or (C) a service incidental to activity described in subparagraph (A) or (B) including, but not limited to, storage of property. "Motor carrier transportation contract" shall not include the uniform intermodal interchange and facilities access agreement administered by the intermodal association of North America or other agreements providing for the interchange, use or possession of intermodal chassis, containers or other intermodal equipment.
The words that state the rule
On appeal, we found the transaction bore a reasonable relationship to New York and stated the “[pjarties had the right to agree that New York would be the forum for determining any disputes arising out of the contract.’’ 225 Kan. at 61 .
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.