407 U.S. 1
The petitioner sought review of the court by certiorari regarding a judgment that was entered by the Fifth Circuit court of appeals.
A forum selection cause in a contract between a German corporation and the United States respondent corporation was held invalid by the lower court.
-The German corporation contracted with the United States corporation to move an oil rig from Louisiana to the Adriatic Sea.
During transportation, the rig was damaged and was towed to Tampa, Florida.
-The United States corporation filed suit in Tampa.
-The German corporation, however, asked the district court to enforce the forum-selection clause that was contained in the contract. This placed jurisdiction in England.
-The district court refused to enforce the clause and the lower appellate court affirmed the district court's ruling.
-The court held that the forum-selection clause should be enforced unless the party resisting the clause could show that enforcement of the clause would be unreasonable.
-The argument that such clauses ousted a court of jurisdiction was found not to be valid.
-The German corporation did not waive operation of the clause by appearing in the federal court.
-As a result, the court stated that the forum selection clause was valid.
-The case was remanded for a determination of whether enforcement was unreasonable.
Forum-selection clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances. This is the correct doctrine to be followed by federal district courts sitting in admiralty.
OUTCOME: The court vacated the lower appellate court's judgment and remanded this case for a determination of whether the enforcement of the forum-selection clause was unreasonable or reasonable.
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