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LEGAL will apply the selected state law to evaluate the terms of the Forum selection clauses should also be analyzed to de- agreement. There is always the chance of an unintended termine if the agreement is selecting a forum that is fair consequence based upon the application of a state’s law to both parties and complies with jurisdictional laws. For that you are not familiar with. example, many contracts name the federal district court

On the other hand, some parties to an agreement will in a certain state as the court of jurisdiction to resolve dis- attempt to insert a choice of law provision for the sole pur- putes. However, if the claim does not include a basis for pose of taking advantage of the state law called for in the federal jurisdiction, a contractual statement requesting ju- agreement. If you have an agreement that calls for the ap- risdiction does not give the court the power to hear such a plication of a state law that has no reasonable basis, such as claim. It is also critical that the forum selected be analyzed an agreement between companies doing business and Loui- to make sure that it provides a fair venue for adjudicating siana and Texas calling for Alabama law to apply, it is a good disputes. You may have issues receiving a fair trial if you idea to investigate the rami? cations of such a choice of law. are litigating in the backyard of a regionally powerful party.

These choice of law issues often arise in defense and in- Unfortunately, in bad times such as these, the details of demnity obligations as some states prohibit indemnity for oil your agreements can signi? cantly affect your company’s ? eld related contracts. Each state treats indemnity disputes, bottom line. A little time and effort put into reviewing your and their related insurance obligations, differently. Thus, the current contracts to make sure that they clearly bind your selection of state law will often determine how the obligation company to the obligations you intended can save you and is enforced. Thus, it is very important to look at the choice your company signi? cant time and resources by avoiding of law provision to make sure that any such selection is pro- contractual disputes. Furthermore, when a dispute arises, viding your company with enforceable obligations. the issues can be worked out quickly if the contract pro-

Many contracts also include arbitration provisions to vides a clear recitation of the parties’ rights and obligations. evaluate disputes arising under the agreement. Although arbitration can be a faster way to resolve a dispute, it is not Mr. DeMarcay is a partner in the law ? rm of Fowler always cheaper as it requires the parties to shoulder the costs Rodriguez Valdes-Fauli. His areas of practice include associated with litigating the matter, including paying the Commercial Litigation, Admiralty, Personal Injury, arbitrators. You are also bound by the arbitrator’s decision Transportation, Real Estate, Construction and Corporate and do not have any venue available to appeal a decision Law. Prior to attending law school, Mr. DeMarcay served that you believe is incorrect. Again, arbitration is not a bad on the Washington based legislative staff of Congressman option, but it is important that you are aware that you are Jimmy Hayes. On the WEB: www.frvf-law.com agreeing to an alternate form of dispute resolution.

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