Intershop Communications AG v. Superior Court, 104 Cal. App. 4th 191 (2002)

Frank Martinez, a California resident, sued his former employer, Intershop Communications, Inc., and its German parent company for breach of a stock options exchange agreement. The exchange agreement contained a choice-of-law (German law) and forum-selection clause (Hamburg, Germany). The trial court denied Intershop’s motion to stay the proceedings pursuant to the doctrine of forum non conveniens. The Court of Appeal reversed, holding that the parties’ express language (“to the extent permitted by the applicable laws the parties elect Hamburg to be the place of jurisdiction”) made the forum selection mandatory and not merely permissive. The Court further held that Martinez had failed to meet his burden to demonstrate that “substantial justice could not be achieved in a German court or that a rational basis is lacking for the selection of Hamburg as the forum.” Finally, even though the agreement at issue was a contract of adhesion, Martinez had failed to demonstrate that he did not have full notice that he was agreeing to the selected forum.