Beware of the law – and the location – you choose to resolve your contractual disputes. Choice of law and forum selection provisions are commonly used, often misunderstood, and frequently overlooked contract clauses that can significantly alter a litigant’s legal rights and remedies.
The partnership agreement said the law of California would govern disputes and a court in Beverly Hills would be the exclusive venue. The underlying asset, an oil and gas lease, was located in Reeves County, Texas. The dissatisfied partner, a Texan, understandably sought to litigate his breach of warranty, fraud and fraudulent misrepresentation claim in a Texas court. The district court and the appellate court took a look at the forum selection provision and dismissed the lawsuit, requiring the partner to pursue his claims in Bevely Hills.