March 28, 2023
In law, the forum is not where the Los Angeles Lakers play basketball or that famous plaza in ancient Rome. It’s the place where a lawsuit is filed, like Baltimore City, Harris County, Texas, or California. While the place a lawsuit will happen may be the last thing on your mind when negotiating a contract (price and payment terms are most important, right?), ignoring the forum could cost you a fortune.
The problem is that in many contracts, particularly those from large companies, you agree that the forum will be where the other side is headquartered, which can be inconveniently far from where you live or work. For example, let’s assume that you have a small business in Maryland and you contract with a company in Nevada to build your website. The “forum selection” provision in the contract they send you says that all lawsuits must be fought in Las Vegas. A dispute arises, your website doesn’t work, and you want to sue to get your money back, but to do that you will have to incur the cost and inconvenience of suing in a place over 2000 miles away. Or, perhaps the website company sues you, claiming that money is owed. Either way, the cost of fighting from afar will put you at a distinct disadvantage. Bottom line - try to have your contracts say that all disputes must be resolved in courts near you.