Franchisees are sometimes at a disadvantage when disputes develop with their franchisors. New Jersey recognized this and enacted the New Jersey Franchise practice Act (NJFPA) years ago to protect franchisees from abuse.
The NJFPA specifically provided that franchisees could institute suit against franchisors in the Superior Court in New Jersey to recover damages or injunctive relief for a violation of the NJFPA.
Often franchise agreements require disputes with the franchisor be exclusively adjudicated in foreign jurisdictions convenient to the franchisor.
YOU BE THE JUDGE: Can a franchisee be compelled to arbitrate disputes with a franchisor in an inconvenient place designated in a franchise agreement?
New Jersey courts have held these forum-selection clauses are presumptively invalid because they conflict with the purpose of the NJFPA to protect New Jersey franchisees..
Recently, a judge of the Chancery Division examined a franchise agreement with a different wrinkle–the agreement provided that disputes be exclusively determined in arbitration in Minnesota under the Federal Arbitration Act. Because federal law–and not New Jersey law–was invoked, the judge held the forum-selection clause was not presumptively invalid.
The judge held that a franchisee could still attack the forum-selection clause under basic contract principles. However, in the case under consideration, the franchisee had not shown any reason to avoid arbitration in Minnesota.
The decision points out that a courtroom can bring justice and may be the only way to protect your rights. We know courtrooms; we have harnessed the power of the law in courtrooms to bring justice for our clients for decades. Please contact us to discuss how we can help you in a new lawsuit or provide a “second opinion” about your pending lawsuit. There is no obligation for the initial consultation.
The New Jersey Law Firm and its attorneys are dedicated to client-driven results and protecting individual rights and business interests. For 40 years, the Law Firm has been recognized for sound legal judgment, immigration laws, real estate cases, litigation, contracts and advocacy in serving the transactional needs of both individual and business clients. If you need assistance with business or corporate formation and operations, or you seek legal advice about insurance defense, arbitrations, wrongful termination, discrimination, personal injury, environmental issues, bankruptcy, insurance, civil rights and other litigation alternatives, the Law Firm has the comprehensive experience, foresight, skills and talent to assist you to safeguard your assets, interest and investments. The New Jersey Law Firm’s highly devoted, motivated, experienced, skilled lawyers/attorneys and effective legal professionals are always there to assist you.
About the Author
Author, Samuel D. Bornstein, is associated with the law firm (http://www.bornsteinlawfirm.com/) and has 40 years of experience in representing individuals and a wide variety of businesses from Fortune 100 companies that need specialized assistance to smaller companies that look to the firm as their “in house” lawyer for general day-to-day advice. The firm is experienced with transactional work and litigation, emphasizing corporate and partnership operations, employment and workplace law, professional negligence, malpractice matters, immigration, civil rights and real state matters and insurance defense.
Allen Iverson 31pts vs Crossover move on Durant Sonics 07/08