Forum Selection and Choice of Law Provisions in Construction Contracts: Home Court Laws, Enforceability Challenges

This CLE webinar will examine the importance of carefully drafting forum selection and choice of law provisions in construction contracts. The panel will address the rise of home court laws impacting construction contracts and how these may affect the drafting of these terms specifically and even contractual negotiations generally. The panel will also offer best practices for drafting enforceable clauses to protect client interests in case of a dispute.

Forum selection and choice of law provisions are some of the most significant terms in construction contracts because they control every aspect of the parties' obligations and liabilities undertaken on a project based on the laws of the selected jurisdiction. Yet these terms may be given little thought, are often comprised of boilerplate language, and usually relegated to the back of the contract. This is problematic when disputes arise and the parties find these provisions to be unenforceable, thereby subjecting them to a different forum or jurisdiction's laws than was anticipated during negotiations.

Additionally, a growing number of states have enacted home court laws of varying scope that dictate the enforceability of choice of law and forum provisions in construction contracts. For example, Texas recently amended its statutes declaring that, for projects located in Texas, any forum selection clause that requires venue for litigation or arbitration in another state or choice of law provision that requires the dispute be governed by another state's laws are void as against public policy. The parties may only agree to a different venue after a dispute arises. 

The requirements of these home court laws may vary greatly. Some states require construction disputes for projects in the state to be resolved under its laws and in its courts; other states require only that its laws govern but do not require the dispute to be resolved there. Also, there may be different triggers as to when the statute applies. 

Counsel should be aware of how these home court laws may affect, not only the drafting of choice of law and forum selection clauses, but contract negotiations overall as these may be impacted by the law that will be applied if a dispute arises.

Listen as our expert panel provides a comprehensive overview of forum selection and choice of law provisions in construction contracts. The panel will discuss the importance of careful drafting, examine the impact of home court laws, and offer best practices for drafting enforceable terms to protect clients' interests.