I am Being Sued Where? Forum Selection Clauses

by Andy Arnold on May 3, 2011

Too many employees who have signed a non-compete agreement fail to take notice that they have agreed to be sued in another state.  These provisions are known as “forum selection clauses.” The costs of going to another state to defend yourself can be significantly higher than litigating in your home state.  At least half of the agreements I review state that the parties have agreed to having another state’s court will decide any dispute.

However, if you are a South Carolina resident, you should know that S.C. Code § 15-7-120(A) states:  ”Notwithstanding a provision in a contract requiring a cause of action arising under it to be brought in a location other than as provided in this title and the South Carolina Rules of Civil Procedure for a similar cause of action, the cause of action alternatively may be brought in the manner provided in this title and the South Carolina Rules of Civil Procedure for such causes of action.”  This statute essentially provides that a S.C. resident, who has signed a contract with a forum selection clause, may file their case in a South Carolina court as long as it otherwise has jurisdiction.

In the case of a forum selection clause in S.C., it can be a race to the courthouse.  The stakes can be high.

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