FASA Publishes ‘Anti-Forum Selection Clauses in the 50 States’
Manual Is a No-Cost Benefit for ASA Members
ALEXANDRIA, Va.—Out-of-state general contractors commonly require their subcontractors to sign forum-selection clauses, arguing that it’s more convenient and less expensive for them to resolve disputes in a jurisdiction of their choice.
For example, a general contractor headquartered in Alaska may place a forum-selection clause in a contract on a project in Texas stating that “Regardless of the site of the project, the laws of the State of Alaska shall govern in the interpretation of any contract-related issues, and any hearings or dispute resolution meetings shall be held in the State of Alaska.”
Such clauses may create an undue hardship for the subcontractor on such a project. The subcontractor may have to comply with laws and regulations with which it is not familiar and be held accountable for failure to comply; the subcontractor may have to bear the expense of travel and litigation in a distant location. Further, the subcontractor may not be able to access witnesses or provide other evidence to support its position in a dispute.
Ultimately, the additional burdens of a distant forum can often be prohibitive and effectively deprive a subcontractor of its day in court and/or leverage it to heavily discount, if not abandon, even the most worthy of claims.
Many states view forum-selection clauses as against public policy and make them “void and unenforceable.” The Foundation of the American Subcontractors Association has published a comprehensive manual, Anti-Forum Selection Clauses in the 50 States, to help subcontractors understand how forum-selection clauses are treated in the 50 states and the District of Columbia.
The ASA-member law firm and ASA general counsel, Kegler, Brown, Hill and Ritter, Columbus, Ohio, prepared the manual, which is available only to ASA members. To learn more about becoming a member of ASA, select Chapter Network under Join in the index on the ASA Web site.
FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.