Legal Memorandum: Dismissal of a Forum-Selection Clause

Issue: Under Wisconsin law, when may a forum-selection clause require a dismissal in favor of a foreign forum such as Italy?

Area of Law: Business Organizations & Contracts, International Law & Global Trade, Litigation & Procedure
Keywords: Forum-selection clauses; Foreign forum
Jurisdiction: Federal, Wisconsin
Cited Cases: 3 F.3d 156; 56 F.3d 825; 13 F.3d 215; 121 F.3d 24; 870 F.2d 356; 858 F.2d 905
Cited Statutes: None
Date: 05/01/2000

           A material dispute over the translation of the forum selection clause would clearly render dismissal inappropriate.  See, e.g., Assar v. Crescent Counties Found. for Me. Care, 13 F.3d 215, 217 (7th Cir. 1993) (on motion to dismiss, court “must make all factual inferences” in plaintiff’s favor); Rankow v. First Chicago Corp., 870 F.2d 356, 367 (7th Cir. 1989) (“[T]he district court assumed away a key, apparently disputed, issue of fact.  This was incorrect on a motion to dismiss.”).  

However, when it is not clear that there is a material dispute, a court may not find that the language used by a translator (i.e., “are settled” and “belong” rather than “shall”) is permissive rather than mandatory.  In Frietsch v. Refco, 56 F.3d 825 (7th Cir. 1995), the Seventh Circuit faced a situation in which a forum-selection clause was in German and the plaintiff claimed that, interpreted correctly, it was permissive rather than mandatory.  The court “hesitate[d] to put much weight on semantic niceties when dealing with a translation,” id. at 829, and instead relied on the following analysis:

[T]he natural forum for a suit between Germans over contracts formed in Germany would be—Germany.  You would not need a clause to permit suit in the very place to which no one could object as the site of the suit.  But you would need the clause to require suit there if there were alternative possible sites.  The obvious function of the clause […]

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