Does our forum clause actually require the other side to sue in the place we named?
Only if the words say so. In Converting/Biophile the Court of Appeals reversed a dismissal that had treated a forum-selection provision in the seller's invoices as mandating that all claims from the parties' commercial transaction be brought in Ohio: the court read the clauses as permissive, not mandatory, and remanded for further proceedings on the complaint. On an issue of first impression it adopted other jurisdictions' holdings as the law of Wisconsin: the language of a mandatory clause must show more than that jurisdiction is appropriate in the designated forum and must unequivocally mandate exclusive jurisdiction, and absent specific language of exclusion an agreement conferring jurisdiction in one forum will not be read as excluding jurisdiction elsewhere. The court held in the alternative that the clause was at least ambiguous, and that an ambiguous provision is construed against the party who drafted it. Separately, a Wisconsin forum or choice-of-law term cannot be used to escape a Wisconsin statute that embodies fundamental state policy: Bush held that because the Fair Dealership Law embodies a strong state public policy, parties cannot avoid it by including a contrary choice-of-law provision in their contract, refused to honour that clause, and applied Wisconsin law.
The trap
Start where the court started: a forum-selection clause is presumptively valid in Wisconsin, and where parties have agreed on a forum there is a strong presumption favouring venue there unless enforcement is shown to be unreasonable, unconscionability and violation of public policy being the grounds on which Wisconsin courts have refused to enforce one. What the clause then has to be is mandatory on its face. Living in the seller's invoices rather than in a negotiated agreement did not save the buyer: the court held that regardless of the buyer's claimed lack of awareness of them, the invoice terms could become part of the contract, subject to the exceptions in Wis. Stat. § 402.207 (2). The procedural posture matters too: because the motion to dismiss rested on material outside the complaint, the court treated it as one for summary judgment. The invoice is not what sank the clause: the court agreed "that an invoice can introduce additional terms to the parties' standing agreement, subject to the exceptions in Wis. Stat. § 402.207 (2)", and held instead that "due to its permissive and ambiguous phrasing, the forum-selection clause does not operate to bar jurisdiction or venue in Wisconsin." So permissive wording is what is doing less work in Wisconsin than a drafter assumes, wherever it sits, and the second half of this rule limits even a well-drafted clause where a fundamental Wisconsin policy is in play.
14 authorities
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
The circuit court dismissed CBL's action as improvidently commenced in Wisconsin because it read a forum-selection provision in Ludlow's invoices to CBL as mandating that all claims resulting from the parties' commercial transaction be brought in Ohio. We disagree. We read the clauses as permissive, not mandatory.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
Here, however, the motion to dismiss was granted based on the forum-selection clause in the invoices, a matter not alleged in CBL's complaint. When, on a motion to dismiss, parties present matters outside the pleadings, the motion should be processed as one for summary judgment.
The words that state the rule
We further conclude that because the WFDL embodies a strong state public policy, parties cannot avoid it by including a contrary choice of law provision in their contract.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
We reverse the circuit court's order dismissing CBL's complaint and we remand for further proceedings on the complaint.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
Buyer hereby consents to and submits to the jurisdiction of the courts of the State of Ohio and further consents to venue of any such proceeding in the Common Pleas Court of Sandusky, Ohio, or the United States District Court for the Northern District of Ohio, Western Division, based upon the location of Seller's principal place of business.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
The forum-selection clause says nothing about jurisdiction and venue being exclusive to Ohio. The result is that the clause is permissive, not mandatory.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
We agree with the circuit court's holding that an invoice can introduce additional terms to the parties' standing agreement, subject to the exceptions in Wis. Stat. § 402.207 (2). We conclude, however, that due to its permissive and ambiguous phrasing, the forum-selection clause does not operate to bar jurisdiction or venue in Wisconsin.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
A contract's forum-selection clause is presumptively valid in Wisconsin. Pietroske, Inc. v. Globalcorn, Inc., 2004 WI App 142, ¶ 1 , 275 Wis. 2d 444 , 685 N.W.2d 884 . Our common law obligates parties to a contract to perform their duties under the contract. See Ranes v. American Family Mut. Ins. Co., 219 Wis. 2d 49, 57 , 580 N.W.2d 197 (1998). Therefore, when parties have previously agreed that litigation should be conducted in a particular forum, there is a strong presumption favoring venue in that forum, unless enforcement is shown to be unreasonable under the circumstances. Beilfuss, 274 Wis. 2d 500, ¶ 17 (citing M/S Bremen, 407 U.S. at 10 ). However, where a forum-selection clause is deemed to be unconscionable or a violation of public policy, we have declared it unreasonable and have refused to enforce it.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
The language of a mandatory clause shows more than that jurisdiction is appropriate in a designated forum; it unequivo *288 cally mandates exclusive jurisdiction. See Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77-78 (9th Cir. 1987). Absent specific language of exclusion, an agreement conferring jurisdiction in one forum will not be interpreted as excluding jurisdiction elsewhere. John Boutari & Son, 22 F.3d at 53 .
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
We conclude that these cases are well-reasoned and we adopt the holdings as the law of Wisconsin on this question.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
Even if not clearly permissive, the forum-selection clause at least is ambiguous. We judge a contract's terms objectively by looking to the express words used in the contract.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
Regardless as to which interpretation is ultimately correct, both interpretations are reasonable. Contractual language that is reasonably and fairly susceptible of more than one construction is ambiguous. Dieter, 234 Wis. 2d 670, ¶ 15 . We must construe the provision against Ludlow as the drafter.
- case2006 WI App 187Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp.Wis. Ct. App.decided 2006read it at the source ↗
The words that state the rule
We hold that, regardless of CBL's claimed lack of awareness of them, the Terms and Conditions on the invoices could become part of the contract, subject to the exceptions of § 402.207(2).
The words that state the rule
Therefore the court will not honor the parties’ choice of law clause. National does not argue that absent an effective choice of law provision Minnesota law would still apply. Rather, at oral argument and in its brief to this court it contends that Bush does not meet the Wisconsin statutory definition of dealer. We view this as an acknowledgment by National that Wisconsin law applies if the choice of law clause is disregarded.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.