In re Int'l Profit Assocs. - 286 S.W.3d 921 (Tex. 2009)

Rule:

The party challenging a forum-selection clause has the burden of proving the clause is invalid, and the party seeking to enforce the forum-selection clause is not obligated to prove that it specifically showed the clause to the opposing party as a condition of enforcement.

Facts:

Riddell Plumbing, Inc. hired a consulting contract with International Profit Associates, Inc. The contract contained a forum-selection clause. When a dispute arose, a lawsuit was filed in Texas. A motion to dismiss was filed based on the forum-selection clause. The trial court denied the motion, holding that IPA did not sustain its burden of proving that the page of the contract containing the forum-selection clause was ever presented to Riddell. IPA sought a writ of mandamus from the court of appeals, arguing that the trial court abused its discretion in not granting the motion to dismiss because IPA did not have the burden of proving that it showed the forum-selection clause to Riddell. The court of appeals denied IPA's petition for writ of mandamus without explanation.

Issue:

Did the trial court abuse its discretion by requiring parties who seek to enforce a forum-selection clause to prove they showed the specific clause to the opposing party? 

Answer:

Yes.

Conclusion:

The court conditionally granted the relief sought, holding that the trial court abused its discretion by requiring the consultants to prove that the forum-selection clause was shown to the corporation's representative. Even though concealment could have been sufficient to invalidate a forum-selection clause, evidence that the consultants did not direct the representative to the clause was insufficient as a matter of law to prove fraud or overreaching. Despite a claim that the first page of the contract containing the clause was not provided, there was evidence that the representative should have known of the existence of the clause when the contract was signed. Simply being unaware of the forum-selection clause did not make it invalid. There was no evidence that the selected forum or choice of law deprived the corporation of its day in court by subverting its substantive rights.