Contracts frequently contain forum selection clauses that determine the venue for litigating disputes arising in connection with that contract. The inclusion of a forum selection clause can make future litigation more predictable by enabling the parties to hire appropriate counsel and understand the selected jurisdiction’s applicable rules. While such clauses are generally enforceable in New York, very narrow grounds exist for their non-enforcement.
One basis on which New York courts have refused to enforce a forum selection clause is where it conflicts with the internal affairs doctrine. The internal affairs doctrine directs that issues concerning the internal affairs of a corporate entity should be determined by the law of its place of incorporation and by the courts of that forum, regardless of any conflicting choice of law clause or venue selection clause in the contract at issue.
