Did you enter into a contract in North Carolina only to find out there was a clause that specified you had to bring any claims arising under that contract in another state? Do you want to bring a claim in the State of North Carolina but you think you now can’t? Never fear because North Carolina law provides for contracts that have forum selection provisions.

 

The term “forum selection” means where a claim, dispute, or arbitration can be heard. This type of contract provision could say something like this: “This agreement and performance hereunder shall be governed in all respects by the laws of the State of XYZ. Any claim that arises between the parties shall be resolved solely in the courts of the State of XYZ.”

 

However, in North Carolina, these types of provisions are considered to go against public policy. North Carolina wants to protect its citizens and allow them to bring their claims in North Carolina. As such, the provision will be void and unenforceable.

 

Keep in mind that there are two instances when the provision will apply: (1) the provision is in a non-consumer loan transaction; and (2) the dispute is commenced in another state (not North Carolina) pursuant to a forum selection provision, and all parties to the contract consented to that when the dispute arose.

 

For more information, please contact Meredith Hudson at meredith@lawplusplus.com or call (919) 375-3039.

 

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