Will a Minnesota court enforce the clause requiring suit somewhere else?
Generally yes. The Supreme Court held in Hauenstein that when the parties to a contract agree that actions arising from that contract will be brought in a particular forum, that agreement should be given effect unless the party seeking to avoid it shows that to do so would be unfair or unreasonable, expressly overruling Detwiler to the extent it was inconsistent. Unreasonableness falls into three categories: the chosen forum is a seriously inconvenient place for trial; the choice-of-forum agreement is one of adhesion; or the agreement is otherwise unreasonable. In Hauenstein itself the clause was enforced: 'it is incumbent upon the party seeking to escape the contract to show that to be forced to litigate in the contractual forum would be unreasonable', and the appellant there 'has failed to make such a showing'. Two Minnesota statutes void such clauses in specific contracts. In a building and construction contract to be performed in Minnesota, a provision requiring that any litigation, arbitration or other dispute resolution process on the contract occur in another state is void and unenforceable (Minn. Stat. § 337.10, subd. 1). And an employer must not require an employee who primarily resides and works in Minnesota, as a condition of employment, to agree to a provision requiring the employee to adjudicate outside Minnesota a claim arising in Minnesota; such a provision is voidable at any time by the employee, and adjudication for this purpose includes litigation AND arbitration (§ 181.988, subd. 3).
The trap
The inconvenience argument almost never works, because Hauenstein set the bar at The Bremen's: for the chosen forum to be 'seriously inconvenient' one party would have to be 'effectively deprived of a meaningful day in court'; the only case Hauenstein found where inconvenience was determinative was one 'where the plaintiff alleged that he would be unable to prosecute his claim if the forum clause was enforced'. Adhesion is the more promising attack (forum clauses in take-it-or-leave-it contracts that are the product of unequal bargaining power between the parties are unreasonable), but Hauenstein found no adhesion where the clause was boilerplate in a printed form, because the appellant had not shown a great disparity in bargaining power, no opportunity for negotiation, or that the goods could not be obtained elsewhere. The third category is the opening, though the argument Hauenstein heard under it failed: enforcement is unreasonable where it 'would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision', which is where §§ 337.10 and 181.988 do their work. Note the limits those sections state themselves: § 337.10, subd. 1 reaches a 'building and construction contract' as defined in § 337.01, subd. 2, and § 181.988, subd. 3(e) says 'This subdivision applies only to claims arising under this section.' Hauenstein also held that asserting counterclaims and cross-claims does not waive a forum selection clause, because waiver is an intentional relinquishment of a known right that must clearly appear.
17 authorities
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
We agree with these authorities and therefore hold that when the parties to a contract agree that actions arising from that contract will be brought in a particular forum, that agreement should be given effect unless it is shown by the party seeking to avoid the agreement that to do so would be unfair or unreasonable. To the extent that Detwiler is inconsistent with our opinion, it is overruled.
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
The elements of unreasonableness can be divided into three categories: (1) the chosen forum is a seriously inconvenient place for trial; (2) the choice of forum agreement is one of adhesion; and (3) the agreement is otherwise unreasonable.
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
In The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 , 92 S.Ct. 1907 , 32 L.Ed.2d 513 (1972), the Supreme Court stated that for the chosen forum to be “seriously inconvenient,” one party would have to be “effectively deprived of a meaningful day in court.”
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
Forum selection clauses in contracts which are termed adhesion — “take-it-or-leave-it” — contracts and which are the product of unequal bargaining power between the parties are unreasonable.
- statuteMinn. Stat. § 337.10enactment date not established
The words that state the rule
Provisions contained in, or executed in connection with, a building and construction contract to be performed in Minnesota making the contract subject to the laws of another state or requiring that any litigation, arbitration, or other dispute resolution process on the contract occur in another state are void and unenforceable.
- statuteMinn. Stat. § 181.988enactment date not established
The words that state the rule
Subd. 3. Choice of law; venue. (a) An employer must not require an employee who primarily resides and works in Minnesota, as a condition of employment, to agree to a provision in an agreement or contract that would do either of the following: (1) require the employee to adjudicate outside of Minnesota a claim arising in Minnesota; or (2) deprive the employee of the substantive protection of Minnesota law with respect to a controversy arising in Minnesota.
- statuteMinn. Stat. § 181.988enactment date not established
The words that state the rule
(b) Any provision of a contract or agreement that violates paragraph (a) is voidable at any time by the employee and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in Minnesota and Minnesota law shall govern the dispute.
- statuteMinn. Stat. § 181.988enactment date not established
The words that state the rule
(d) For purposes of this section, adjudication includes litigation and arbitration. (e) This subdivision applies only to claims arising under this section.
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
In support of the view that the contract before this court is one of adhesion, it could be argued that the forum selection clause is boilerplate language contained in a printed form contract prepared by respondent on a “take-it-or-leave-it” basis. However, these factors alone do not define adhesion contracts. Appellant has not shown, for example, a great disparity in bargaining power, that there was no opportunity for negotiation, or that the press brake could not have been obtained elsewhere. See Green v. Clinic Masters, Inc., 272 N.W.2d 813, 816 (S.D.1978). The clause in question was not written in technical jargon and was contained in an easily readable contract and consisting of only two pages. Appellant is not an unsophisticated individual, but a business corporation that presumably has personnel able to evaluate agreements such as that involved in this case. In short, the choice of forum was made in an arm’s-length transaction between persons having business experience; it should be honored by the parties and enforced by the courts absent some compelling and countervailing reason.
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
Other indications of unreasonableness in forum selection agreements are sure to arise where for reasons other than those enumerated above, to enforce the agreement would be unfair or unreasonable. One example is where enforcement of the forum selection clause “would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.”
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
The assertion of counterclaims and cross-claims is irrelevant to the determination of whether respondent waived the contractual forum selection clause. In contract law, a waiver is defined as an intentional relinquishment of a known right, and it must “clearly be made to appear from the facts disclosed.”
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
Applying this test, there can be no doubt that respondent did not intend, at any time in the litigation, to waive the forum selection clause. Respondent’s assertion of a counterclaim and cross-claims does not express an intent to waive the contractual defense, especially when that defense is interposed in the same pleading.
- statuteMinn. Stat. § 337.01enactment date not established
The words that state the rule
"Building and construction contract" means a contract for the design, construction, alteration, improvement, repair or maintenance of real property, highways, roads or bridges. The term does not include contracts for the maintenance or repair of machinery, equipment or other such devices used as part of a manufacturing, converting or other production process, including electric, gas, steam, and telephone utility equipment used for production, transmission, or distribution purposes.
- statuteMinn. Stat. § 337.10enactment date not established
The words that state the rule
For the purpose of this section, "building and construction contract" has the meaning given the term in section 337.01 .
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
The only case in which inconvenience was determinative is Matthiessen v. National Trailer Convoy, Inc., 294 F.Supp. 1132 (D.Minn.1968), where the plaintiff alleged that he would be unable to prosecute his claim if the forum clause was enforced. Id. at 1135 . Appellant has made no such allegation in this case.
- case320 N.W.2d 886Hauenstein & Bermeister, Inc. v. Met-Fab Industries, Inc.Minn.decided 1982read it at the source ↗
The words that state the rule
Under such circumstances it is incumbent upon the party seeking to escape the contract to show that to be forced to litigate in the contractual forum would be unreasonable. Appellant has failed to make such a showing.
- statuteMinn. Stat. § 181.988enactment date not established
The words that state the rule
(c) "Employee" as used in this section means any individual who performs services for an employer, including independent contractors.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.