What does a forum selection clause in a contract do?

A forum selection clause in a contract is a provision that designates a specific jurisdiction where disputes arising from the contract will be resolved. This clause is important because it provides certainty and clarity to the parties involved regarding where legal proceedings will take place, thereby reducing the risk of unexpected jurisdictional challenges. By agreeing to a particular forum, both parties can plan accordingly, knowing the legal standards and procedures they will be subjected to.

The other options do not accurately describe the function of a forum selection clause. It does not permit a party to change the jurisdiction at will, nor does it limit disputes solely to state courts or apply only to international contracts. Instead, it applies broadly to various types of contracts, providing an agreed-upon location for litigation, whether the contracts are domestic or international.