Companies that rely on contractual forum-selection clauses to keep their disputes out of US courts should take note of a recent opinion from the US Court of Appeals for the Second Circuit, in New York. In Phillips v Audio Active, [2007], the court took a more restrictive approach to the interpretation of contractual forum-selection clauses than had previously been adopted by the Court of Appeals for the Seventh Circuit, in Chicago. As a result, the plaintiff Phillips was allowed to proceed in New York with certain statutory and common law claims related to the subject matter of an agreement into which he had entered with the defendant, even though the contract specified that “any legal proceedings that may arise out of [the contract] are to be brought in England”.

In the earlier Seventh Circuit case, Omron Healthcare v MacLaren Exports, [1994], the court held that a forum-selection clause applicable to all claims that “arise out of” a contract applies to “all disputes the resolution of which arguably depend on the construction of an agreement”. As a result, the Seventh Circuit held that plaintiff Omron was required to litigate its trademark infringement claim in the High Court of Justice in England, even though the plaintiff’s statement of its claim did not require any reference to the parties’ contract or any contractual rights or obligations.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]