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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: January 14, 2017

Court Will Not Enforce Unreasonable Forum Selection Clause

On January 12, 2017, the First Department issued a decision in Prospect Funding Holdings L.L.C v. Maslowski, 2017 NY Slip Op. 00253, holding that a forum selection clause should not have been enforced, explaining:

The New York action should have been dismissed pursuant to CPLR 327(a). In the interest of substantial justice, the parties’ dispute should be heard in Minnesota. Ms. Maslowski demonstrated that the choice of forum provision in the parties’ agreement is unreasonable and should not be enforced. Every aspect of the transaction at issue occurred in Minnesota, the parties, documents, and witnesses are located in Minnesota, and defending this action in New York would be a substantial hardship to Ms. Maslowski.

(Internal quotations and citations omitted).

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