Forum Selection Clause:

Question: What is a forum selection clause in Ontario contracts, and can it be enforced if a dispute starts elsewhere?

Answer: A forum selection clause is a contract term where both parties agree in advance which court or location will hear disputes, and Ontario courts often enforce it unless there’s a strong reason not to, including where a statute gives another forum exclusive jurisdiction; see Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., [2012] 1 S.C.R. 359.   For practical, cost-effective help reviewing or drafting enforceable clauses and related contract steps, contact VP Legal Services & Notary for Paralegal and Notary Services across Ontario at (437) 286-1499.

Forum Selection Clause

Parties to contracts may expressly attorn by including a forum selection clause that specifies where disputes arising from the contractual relationship must be resolved.  Such clauses may identify a specific province, city, or even county, as the agreed geographical location, forum.  When a dispute arises, courts will generally uphold these agreements unless the party resisting enforcement can demonstrate a strong cause to disregard the forum selection clause.  On this point, in Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., [2012] 1 S.C.R. 359, the Supreme Court of Canada confirmed that explicit contractual attornment will ordinarily be enforced, and that participation in proceedings without timely objection may also amount to attornment by conduct.  Specifically, the Supreme Court said:

As also explained in Momentous.ca, where a court or tribunal has exclusive jurisdiction, the parties are unable to use a forum selection clause, or other agreement, to oust that jurisdiction in favour of another forum.  This principle ensures that legislatively mandated forums maintain authority over specific subject matters, safeguarding both the integrity of the adjudicative process and the public policy objectives underlying the statutory scheme.

Conclusion

A carefully drafted forum selection clause may serve as a powerful tool for securing predictability and efficiency in dispute resolution by channeling litigation to a chosen jurisdiction.  These clauses reinforce the principle of attornment, whether explicit or implicit, by ensuring that litigants commit to a particular court or tribunal, thereby reducing uncertainty and jurisdictional disputes.  Still, such provisions must be balanced against overriding public policy considerations, statutory exclusivity, or consumer protection principles, that may justify a court declining to enforce a forum selection clause.