A forum selection clause tells the parties where a dispute must be heard. A choice-of-law clause tells them which law reads the contract. In a cross-border contract, these two terms can point to different courts and different legal systems. This page explains how a forum selection clause in a cross-border contract works under Florida law, what Florida courts look at, and what to check in an agreement you already signed.
Eduardo A. Maura is the lawyer responsible for this page. Ayala Law PA’s office is located at 1646 W Snow Ave, Tampa, Florida, and the firm serves businesses in Tampa and Hillsborough County. The firm serves businesses in Tampa, Hillsborough County, and the wider Tampa Bay area.
What a Forum Selection Clause Does in a Cross-Border Contract
A forum selection clause names the court or place where a dispute under the contract will be heard. It is often a single paragraph, but it sets the battleground before any dispute starts.
The wording is the key. Exclusive language says that only the named court hears disputes. Non-exclusive language says a named court may hear them, but it doesn’t stop a party from filing somewhere else. Many drafters write the second version without noticing the difference.
A clause can name a specific court, a state, or a country. It can also use general words like “the courts of Florida.” Each choice produces different results. A clause that names a foreign court sends the dispute abroad. A clause that names Florida works best when the other side can be sued here.
The clause also affects timing. If each company wants to file first in its home country, a clear clause reduces that race. A vague clause can lead to two cases in two countries over the same deal.
If your company signed an agreement with a foreign party and can't tell which court or law would apply, we can review that contract with you. Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
What a Choice-of-Law (Governing Law) Clause Does
A choice-of-law clause picks the legal system that interprets the contract. People also call it a governing law clause. It answers a different question than the forum clause: which law explains what the words mean.
Florida gives parties room to choose. Under § 671.105, when a transaction bears a reasonable relation to Florida and to another state or nation, the parties may agree that either one’s law governs.
The chosen law shapes outcomes. Terms like breach, notice, damages, and limits on liability can carry different meanings in different systems.
A governing law clause does not decide where you file. A contract can choose Florida law and still require a case in another country. Check both clauses separately.
How Florida Courts Review These Clauses
Florida courts look at the chosen terms first, then test them against statutes and case law. Results depend on the contract language, the parties, and the forum where the case is brought.
Under § 685.102, a person may sue in Florida a party located outside the state. The case must arise from a contract that chooses Florida law and in which the outside party agrees to submit to Florida courts. Florida’s long-arm statute, § 48.193, adds that entering a contract that complies with § 685.102 submits a party to Florida jurisdiction for any cause of action arising from that contract.
Courts also test the clause itself. Under Basulto v. Hialeah Automotive, a Florida court refusing to enforce a term as unconscionable must find both procedural unfairness (how the deal was made) and substantive unfairness (how one-sided the terms are).
Whether it applies depends on the facts.
How Arbitration Clauses Interact With Forum Selection
An arbitration clause sends covered disputes to a private decision-maker instead of a court.
Florida enforces written arbitration agreements. Under § 682.02, an agreement to arbitrate existing or future disputes is valid, enforceable, and irrevocable, except on grounds that exist to revoke any contract. Federal law says the same for contracts involving commerce. See 9 U.S.C. § 2.
A party that shows an arbitration agreement can ask a court to order arbitration. Under § 682.03, the court may not refuse arbitration just because the claim seems weak. If the court orders arbitration, the court must also stay the court case over the arbitrable claim, on just terms, and may limit the stay to a severable claim. 9 U.S.C. § 3 sets a similar stay rule in federal court.
Under § 682.02, the court decides whether an arbitration agreement exists and whether a dispute falls under it. The arbitrator decides certain other questions, such as whether conditions for arbitration have been met.
The International Chamber of Commerce advises that an international contract’s arbitration clause name the governing law, the place of arbitration, and the language, and avoid ambiguous wording. See its arbitration clause guidance.
Foreign Parties, Service of Process, and Enforcement Issues
A forum clause alone does not settle whether a foreign party can be sued in Florida. Courts also look at the party’s contacts with Florida and the statutes that reach outside parties.
Florida’s long-arm statute covers several situations. A party can submit to Florida courts for any cause of action arising from breaching a Florida contract by failing to perform acts the contract required in Florida, or from holding a lien on Florida real property (§ 48.193).
Venue is a separate question. Under § 47.011, actions are brought in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located. That section does not apply to actions against nonresidents, so a foreign party raises different questions.
Serving a foreign company takes more time than serving a local one. Collecting a judgment depends on where the other side’s assets are. Payment restrictions can also slow or block performance and remedies, so review those terms early.
Drafting Problems That Commonly Lead to Disputes
The most common problems are vague forum language, conflicting clauses, and governing law terms that don’t cover the claim. Each one can add months of fighting before the merits are reached.
Vague language is the first problem. A clause saying disputes “may” be heard in some court leaves room for two filings. Name the court, state whether the forum is exclusive, and name the country.
Second, a governing law clause may cover contract claims but say nothing about tort claims such as negligence or fraud. In Florida, the economic loss rule applies only in products liability cases, according to Tiara Condominium Ass’n v. Marsh & McLennan Cos.. So a tort claim between contracting parties is not barred by that rule alone. Wording still decides what the clause reaches.
Third, fraud claims need care. Under Frutafino, S.A.S. v. Dole Chile, S.A., a promise of future action can be fraud if the promisor had no intention of performing it when making it.
Finally, under Williams v. Johnson, claims arising from an express contract covering the same subject matter will not support unjust enrichment. Watch for conflicting terms in purchase orders, terms and conditions, and amendments.
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Checklist for Reviewing an Existing Cross-Border Agreement
Start by confirming the parties. Then read the forum, governing law, and arbitration terms side by side. A short review can reveal gaps before a dispute begins.
- Parties. Confirm the correct legal entities are named on each side, and that each signer had authority to bind the company.
- Forum clause. Identify the named court or country, and whether the language is exclusive or non-exclusive.
- Governing law. Check whether the clause covers the full agreement or only part of it, and whether it reaches tort claims.
- Arbitration. Look for an arbitration clause and whether it conflicts with the forum clause.
- Dispute steps. Review required sequences, notice addresses, and any deadlines a dispute could trigger.
- Later changes. Check whether amendments, change orders, or later emails altered the original clauses.
Gather every version of the deal, not just the signed agreement. Purchase orders and updated terms often change the picture.
Takeaways and Next Step for Your Contract
Forum selection decides where a dispute is heard. Governing law decides which law reads the contract. The two clauses can point to different places and legal systems, which adds cost and complexity.
A clear clause written before a dispute arises generally reduces uncertainty. If you are negotiating a new deal with a foreign supplier, buyer, or distributor, draft the forum, governing law, and arbitration terms together.
If your company already signed a cross-border agreement and you can’t tell which court or law applies, you don’t have to sort it out alone. Ayala Law PA can discuss the specific contract language with you. Contact Ayala Law PA or call (305) 570-2208. Case evaluations carry a fee, so ask about it when you call.
Is a forum selection clause the same as a choice-of-law clause?
No. A forum selection clause picks where the case is heard. A choice-of-law clause picks which law interprets the contract.
Can parties pick another state’s or country’s law?
Yes, in some cases. Under § 671.105, when a transaction bears a reasonable relation to Florida and also to another state or nation, the parties may choose whether Florida law or the other state’s or nation’s law governs, subject to the specific exceptions in the statute.
Does an arbitration clause override a court clause?
It can, for covered disputes. Courts decide whether an arbitration agreement exists and whether a dispute falls under it.
Does a governing law clause decide where I file?
No. Under § 47.011, venue depends on where the defendant resides, where the claim arose, or where the property is located. This section does not apply to actions against nonresidents.
