Forum Selection Clause
Forum selection clauses designate which courts have jurisdiction over MCA contract disputes — typically funder's home jurisdiction — providing convenience and consistency for funders managing multi-state merchant portfolios.
Why This Matters
Forum selection clause function: requires litigation in specified courts (e.g., 'exclusive jurisdiction in courts of New York County'), provides predictability for funders, and may discourage merchant litigation given expense of litigating in distant jurisdiction. Generally enforceable in commercial contracts when reasonable, though courts may invalidate clauses imposing extreme inconvenience or fundamentally unfair forum selections. Combined with choice of law clauses, forum selection provides comprehensive jurisdictional certainty for MCA contract enforcement.
Frequently Asked Questions
Frequently Asked Questions
Why are forum selection clauses important for MCA funders?
Operational efficiency. Funders with multi-state merchant portfolios benefit from consolidated litigation in single jurisdiction with experienced courts. Eliminates multi-state litigation complexity.
Do forum selection clauses prevent merchants from filing in their home state?
Generally yes, though enforcement varies. Courts in merchant home states may decline to enforce clauses imposing extreme inconvenience, particularly for small businesses with limited resources to litigate in distant forums.