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In contract law, a forum selection clause (sometimes called a dispute resolution clause, choice of court clause, governing law clause, jurisdiction clause or an arbitration clause, depending on its form) in a contract with a conflict of laws element allows the parties to agree that any disputes relating to that contract will be resolved in a specific forum.
The Rome I Regulation constrains the choice of law for special types of contracts. With a view to the weaker parties, such as consumers, employees and insurants, special choice of law rules are laid down by articles 5-8. The most important rules for companies, mostly closing contracts with consumers, are listed in Art. 6.
The combined clause would include the choice of law that is to govern any dispute arising under the agreement and the choice of forum where disputes will be heard. [4] Once implemented, a choice of law clause will generally be upheld by courts, as long as it is bona fide, legal, and not contrary to public policy. [5]
But if that second state has choice-of-law rules requiring it to apply the forum law, a difference in outcome might arise depending on where the plaintiff invokes jurisdiction. Whether a difference emerges depends on whether the other state operates a single renvoi system. A single-renvoi forum always refers to the other law's choice of law rules.
If the characterization is status/capacity, this will be determined under the lex domicilii (the law of the domicile) in a common law state, and under the lex patriae (the law of the nationality) or habitual residence in a civil law state. Alternatively, the court seized of the matter might apply the lex fori (the municipal law of the forum state).
Lex causae (Latin for "law of the cause"), in conflict of laws, is the law chosen by the forum court from the relevant legal systems when it judges an international or interjurisdictional case. It refers to the usage of particular local laws as the basis or "cause" for the ruling, which would itself become part of referenced legal canon.
Once the forum court decides that it has jurisdiction to hear the case, it must characterise or classify the cause(s) of action, this relates to choice of law matters. That is regarded as the most important and difficult problem in conflict of laws as trade and travel between states have become the norm.
An exception in comity exists: The agreement will not be held valid in the forum country if it violates the law of the forum country, or if it violates the law of nature, or if it violates the Law of God; A contract may be deemed valid in lex loci contractus, but if it is a revenue law of that state it will not be enforced in the forum state.