its plain language, the forum-selection clause [sic] does not take away ‘[b]y respondents’ right to trial by [a] court of competent jurisdiction’ and thereby ‘a contravene the explicit proscription of 46 U.S.C. . Instead, the clause states specifically that actions arising out of the passage contract shall be brought at “if all,” in a court in the State of Florida,’ which, plainly, is a of ‘located ‘court competent jurisdiction’ within the meaning of the statute. By reversing the Court of Appeals decision based on the U.S. Supreme Court Breman, narrowed the protections previously afforded consumer form contracts and established that forum-selection clauses are presumed valid, unless the party challenging the clause demonstrates one of the exceptions established in Breman. Case Law Following the decision, the New Jersey Supreme Court decided Carnival Kubis & where a New Jersey franchise that distributed Perszyk Associates, Inc. v. Sun Microsystems, Inc., computing products challenged a forum-selection and choice-of-law clause requiring that all disputes must be governed by California law and heard in California courts. Contrary to the presumption established by the U.S. Supreme Court, the enforceability of this forum-selection and choice-of-law clause was presumed invalid under N.J.S. 56:10-7.3. The Court expressly rejected an argument that the 1989 amendment indicated that the Legislature intended for the prohibition to apply strictly to motor-vehicle franchise agreements. Instead, the Court found that the forum-selection clauses conflict with the basic “fundamentally legislative objectives of protecting franchisees from the superior bargaining power of franchisors and providing swift and effective judicial relief against franchisors that violate the Act.” While noting that automobile dealerships were clearly considered, the Court further explained that: the Legislature considered [forum-selection] clauses in general to be inimical to the rights afforded all franchisees under the Act. The Legislature apparently elected to limit their express prohibition only to motor-vehicle franchises based on its determination that the use of unequal bargaining power to compel the inclusion of such clauses was largely confined to motor-vehicle franchise agreements. The Court based its reasoning heavily on the presumption that the Legislature’s avowed purpose . . . [is] to level the playing field for New Jersey franchisees. . .The general enforcement of forum-selection clauses in franchise
‘[b]y its plain language, the forum-selection clause [sic] does not take away respondents’ right to ‘a trial by [a] court of competent jurisdiction’ and thereby contravene the explicit proscription of 46 U.S.C. . Instead, the clause states specifically that actions arising out of the passage contract shall be brought “if at all,” in a court ‘located in the State of Florida,’ which, plainly, is a ‘court of competent jurisdiction’ within the meaning of the statute. By reversing the Court of Appeals decision based on Breman, the U.S. Supreme Court narrowed the protections previously afforded consumer form contracts and established that forum-selection clauses are presumed valid, unless the party challenging the clause demonstrates one of the exceptions established in Breman. Case Law Following the Carnival decision, the New Jersey Supreme Court decided Kubis & Perszyk Associates, Inc. v. Sun Microsystems, Inc., where a New Jersey franchise that distributed computing products challenged a forum-selection and choice-of-law clause requiring that all disputes must be governed by California law and heard in California courts. Contrary to the presumption established by the U.S. Supreme Court, the enforceability of this forum-selection and choice-of-law clause was presumed invalid under N.J.S. 56:10-7.3. The Court expressly rejected an argument that the 1989 amendment indicated that the Legislature intended for the prohibition to apply strictly to motor-vehicle franchise agreements. Instead, the Court found that the forum-selection clauses “fundamentally conflict with the basic legislative objectives of protecting franchisees from the superior bargaining power of franchisors and providing swift and effective judicial relief against franchisors that violate the Act.” While noting that automobile dealerships were clearly considered, the Court further explained that: the Legislature considered [forum-selection] clauses in general to be inimical to the rights afforded all franchisees under the Act. The Legislature apparently elected to limit their express prohibition only to motor-vehicle franchises based on its determination that the use of unequal bargaining power to compel the inclusion of such clauses was largely confined to motor-vehicle franchise agreements. The Court based its reasoning heavily on the presumption that the Legislature’s avowed purpose . . . [is] to level the playing field for New Jersey franchisees. . .The general enforcement of forum-selection clauses in franchise
njfpaM110716.docx