Will an Oregon court enforce a forum-selection clause?
Presumptively yes. Forum-selection clauses are presumptively valid unless unfair or unreasonable, and a party filing an action outside the selected forum bears the burden of persuading the court not to enforce the clause (Trinity Bank v. Apex Directional Drilling, 2018, quoting Roberts v. TriQuint Semiconductor and Reeves v. Chem Industrial Co.). The court discussed, as examples and not as a closed list, three circumstances in which that standard may be met: the clause is in a contract of adhesion that was the product of unequal bargaining power; the contract is unconscionable or otherwise violates public policy; or enforcement would be so seriously inconvenient as to be unjust. The inquiry is not whether, on balance, another forum is more convenient or more reasonable than the agreed forum. In Trinity, where the guaranty required any litigation related to or arising from it to be brought only in the City and County of San Francisco and enforcement was not unfair or unreasonable, the trial court had no discretion to deny the motion to dismiss and a peremptory writ of mandamus issued. Separately, a construction contract as defined in ORS 701.620 may not include a provision requiring any litigation, arbitration or other dispute resolution proceeding arising from it to be conducted in another state, and such a provision is void and unenforceable (ORS 701.640), subject to the 701.645 exclusions.
The trap
Trial-court findings that the witnesses, the collateral and a faster, cheaper trial all favoured Oregon did not justify keeping the case: the Supreme Court held those findings showed the wrong standard had been applied, because convenience is not weighed forum against forum (Trinity). In a construction contract within ORS 701.620 to 701.645, an out-of-state litigation, arbitration or other dispute-resolution requirement is void and unenforceable (701.640), but 701.645 takes a Low-Rise Residential Dwelling Code building, a public contract under ORS 279.835 to 279.855 or ORS chapter 279A, 279B or 279C, and the housing it describes outside ORS 701.620 to 701.640 altogether.
10 authorities
The words that state the rule
You agree that any litigation, related to or arising from this guaranty shall be brought only in the City and County of San Francisco, California and you consent to personal jurisdiction in either state or federal court.
The words that state the rule
As to enforceability, we have stated that "forum-selection clauses are presumptively valid unless 'unfair or unreasonable.' " Id. at 426-27 , 364 P.3d 328 (quoting Reeves v. Chem Industrial Co. , 262 Or. 95 , 100-01, 495 P.2d 729 (1972) ). A party filing an action outside the selected forum bears the burden of persuading the court not to enforce the clause.
The words that state the rule
We discussed, as examples, three circumstances where that **261 standard may be met, only one of which is even arguably applicable here.
The words that state the rule
First, if the forum-selection clause is contained in a " 'contract[ ] of adhesion' that [was] 'the product of unequal bargaining power between the parties,' " the clause should be disregarded.
The words that state the rule
Second, Oregon does not enforce contracts that are unconscionable or otherwise violate public policy, and this general rule also applies to contracts containing forum-selection clauses.
The words that state the rule
A third circumstance in which a court may refuse to enforce a forum-selection clause is when doing so would be "seriously inconvenient." Roberts , 358 Or. at 429 , 364 P.3d 328 (quoting Reeves , 262 Or. at 98 , 495 P.2d 729 ). The Restatement elaborates on that circumstance as occurring when the selected forum "would be so seriously an inconvenient forum that to require the plaintiff to bring suit there would be unjust." § 80 comment c. In other words, the inquiry is not whether, on balance, another forum is more convenient or more reasonable than the agreed upon forum, but whether the latter forum is so "seriously inconvenient" that it would be "unjust" to enforce the forum-selection clause.
The words that state the rule
The court's findings included: "8. Except for representatives of [Trinity], witnesses and attorneys for parties were, and are, located in Oregon; **262 "9. Plaintiff's interest in the collateral securing [Apex's and Lachner's] repayment of the loan was perfected in Oregon; "10. At the time the loan was made [Apex and Lachner] represented that the equipment *23 that was purchased using the loan funds was located in Oregon; "11. Trial of the case will be more expeditious and inexpensive in Oregon; "12. The enforcement of a judgment will be easier and more expeditious in Oregon; "13. Dismissal of this case so that [Trinity] must refile in San Francisco, California, will delay resolution and slow the path to justice; "14. The only party reasonably benefited by application of the venue provisions is [Trinity]." Although the trial court did not fully explain its reasoning, those findings indicate that it applied the wrong standard. The trial court evidently sought to determine which forum-Oregon or California-would be more convenient, rather than whether enforcement the forum-selection clause would be "unfair or unreasonable," in the words of Roberts and Reeves , or so "seriously inconvenient" as to be "unjust," in the words of the Restatement .
The words that state the rule
For that reason, the trial court did not have discretion to deny Lachner's ORCP 21A (1) motion to dismiss based on the forum-selection clause: The law required the court to dismiss the action. It was legal error not to do so. A peremptory writ of mandamus shall issue.
- statuteORS 701.640enactment date not established
The words that state the rule
A construction contract may not include any provision, covenant or clause that: (a) Makes the construction contract subject to the laws of another state or that requires any litigation, arbitration or other dispute resolution proceeding arising from the construction contract to be conducted in another state; or (b) States that a party to the construction contract cannot suspend performance under the construction contract or terminate the construction contract if another party to the construction contract fails to make prompt payments under the construction contract pursuant to ORS 701.620 to 701.640. (2) Any provision, covenant or clause described in subsection (1) of this section is void and unenforceable.
- statuteORS 701.645enactment date not established
The words that state the rule
ORS 701.620 to 701.640 do not apply to: (1) A contract for the construction, alteration, repair, maintenance, moving or demolition of a building that is subject to the Low-Rise Residential Dwelling Code; (2) A public contract under ORS 279.835 to 279.855 or ORS chapter 279A, 279B or 279C; or (3) Housing in which all or part of the dwelling units are reserved for rental to persons having an income equal to or less than 80 percent of the median household income for the area as determined by the Housing and Community Services Department.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.