The Illinois Appellate Court has affirmed a decision of a Cook County Circuit Court judge with respect to the forum-selection clause found in a service contract. MillerCoors, headquartered in Chicago, is the second largest brewer in the United States with approximately 30% market share. In 2007, MillerCoors approached Entec regarding parts procurement and management services.
On March 1, 2010, Entec and MillerCoors entered into a contract wherein Entec agreed to provide parts procurement for MillerCoors breweries in Georgia, North Carolina, Virginia and Ohio. The agreement between the parties was a standard contract that MillerCoors had used in the past. The document included a forum-selection clause indicating that all litigation that may arise involving the contract could be brought against MillerCoors in Colorado.That part of the contract was not discussed or negotiated by the evidence that the court reviewed. The contract was nevertheless signed by the parties.
During the course of the contract, MillerCoors understood that some of its suppliers reported that Entec had failed to pay them. This was true even though MillerCoors had paid Entec. MillerCoors began receiving complaints and notices of mechanic’s liens, and some suppliers threatened to cease providing supplies to MillerCoors.
MillerCoors decided that Entec’s contract performance was below its expected levels and canceled the agreement. Entec then filed a lawsuit in Illinois alleging breach of contract, fraudulent scheme, unjust enrichment and commercial disparagement. The lawsuit that was filed in Illinois was in contravention of the forum-selection clause of the contract. MillerCoors moved to dismiss. Initially, the motion to dismiss was denied and then granted on reconsideration. Entec appealed.
The appellate court reviewed six factors listed in the case of Clanca v. D&S Manufacturing, Co., 157 Ill.App.3d 85, 88 (1987).
- The law governing the formation and construction of the contract;
- The residency of the parties;
- The location of execution/performance of the contract;
- The location of the parties and witnesses;
- The inconvenience to the parties of the particular location; and
- Whether the parties bargained for the clause.
The default position of the courts is to honor the forum-selection clause. In order to overrule the forum-selection clause of a contract, the six factors must substantially weight against honoring it.
In this case, the Illinois Appellate Court found that the law governing the contract was generally obligated to honor the forum-selection clause unless it went against the explicit public policy of Illinois law. Here there was no conflict between the forum-selection clause and Illinois public policy.
The court then looked at other factors. Both parties are headquartered in Illinois which tilts the second factor towards Entec. There was no indication that either the execution or the performance of the contract took place in Illinois. The facts of the case seem to point to Colorado as the place where the contract was signed. Both parties claimed to be inconvenienced by having to move witnesses, and evidence was given that Entec is in Illinois as are many of the key witnesses for MillerCoors. There was no evidence that the parties bargained over the forum-selection clause.
In summary, because the factors tilted slightly to MillerCoors, the appellate court affirmed the trial judge’s decision dismissing the complaint due to the forum-selection clause of the contract.
William Brandt, Jr., as Assignee for the Benefit of Creditors of Entec International N.A. v. MillerCoors, LLC.
Kreisman Law Offices has been working with businesses and handling commercial litigation for businesses and its professionals for more than 37 years in Illinois and around Chicago, Cook County and its surrounding areas, including Mount Prospect, Prospect Heights, Chicago (Andersonville), Chicago (Fulton River District), Chicago (Garfield Park), Chicago (Uptown), Bloomingdale, Bolingbrook, Glen Ellyn, Villa Park, LaGrange, Lockport, Mokena, Midlothian, Oak Lawn and Palos Heights, Ill.
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