Category Archives: Forum Selection

10 Tips for Drafting Bullet-Proof Settlement Agreements

Posted on by
4

Few contracts bring as much satisfaction as a well-crafted settlement agreement, for its ability to fully and finally resolve a dispute and bring lasting peace. To ensure that your settlement agreements meet those objectives, here are ten tips to consider.

1. Who is being released? The party being released (Releasee) will generally seek a release of not just itself but its subsidiaries, affiliates, officers, agents and so forth. Provided the Releasor agrees to such language, it should be included in the release provision (e.g., “Releasor hereby releases, waives and forever discharges…”), not in the first paragraph of the agreement after the name of the Releasee, as that would complicate matters, making the subsidiaries and affiliates parties to the agreement.

2. What is being released? To ensure broad coverage, the Releasee will usually want to include detailed recitals of the facts, claims and allegations leading up to the settlement, then state something like this: (all claims and liabilities relating to such matters shall be known as the “Dispute”). It’s then a simple matter to release all claims concerning the Dispute. Of course, the Releasor should make sure that any unsettled disputes are expressly excluded. Continue reading →

Enforceability of Forum Selection Provisions by U.S. Courts

Posted on by
Reply

My former employer, a Taiwan OEM, was sued in U.S. District Court for $5.4 million for alleged breach of a patent licensing agreement. The agreement states that “any U.S. District Court will have jurisdiction” over disputes arising from the agreement. We promptly moved to dismiss for lack of jurisdiction, the case was dismissed and we sued them in Taiwan instead (“Ha! Welcome to Taiwan. How’s your Mandarin?”).

In that case, the U.S. federal court lacked jurisdiction – despite the choice of forum provision – because none of the parties was a U.S. entity, so no diversity jurisdiction existed, and the claim was for breach of contract, which is a state, not a federal claim. That is, the criteria for federal jurisdiction were not met and parties cannot create federal jurisdiction even by mutual agreement where it does not otherwise exist.

While the dismissal of our case was exhilarating, it was hardly a rare event. Courts routinely disregard the express language of choice of forum provisions when they feel the chosen forum is improper. Continue reading →