Court Rejected Out-of-State Venue Clause

The North Carolina Court of Appeals ruled that a forum selection clause in a contract dispute was unenforceable.

Updated on Oct. 12, 2026 in Law

Court Rejected Out-of-State Venue Clause

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Should companies be able to enforce forum selection clauses hidden in online standard terms?

The North Carolina Court of Appeals affirmed the denial of a motion to dismiss a breach of contract lawsuit, ruling that a forum selection clause requiring litigation in South Carolina is unenforceable. The case stems from a dispute over unpaid invoices for crane services provided to a manufacturing mill.

Why it matters

The ruling underscores the protections provided by N.C. Gen. Stat. 22B-3, which voids provisions requiring litigation outside of North Carolina for contracts formed within the state. It also highlights the legal risks corporations face when purchase orders fail to clearly specify which external terms apply to a transaction.

The dispute involves invoices totaling $1.48 million for crane services that were initially estimated to cost $695,387. The appellate court found that New-Indy purchase orders failed to clarify which of four conflicting sets of standard terms governed the agreement.

The players

Superior Cranes Inc.

A North Carolina-based company that initiated the breach of contract lawsuit over unpaid service invoices.

New-Indy Catawba LLC

A manufacturing company operating a mill in South Carolina that disputed the venue for the legal proceedings.

The details

The court determined the contract was formed in North Carolina when a representative from Superior Cranes approved a purchase order emailed by New-Indy. Because the purchase orders relied on conflicting external website terms, the judges found the specific forum selection requirement was not properly incorporated.

January 2025: New-Indy Catawba LLC discovered a crack in its lime kiln.
October 12, 2026: The Court of Appeals affirmed the denial of the motion to dismiss.

Political Context

This ruling follows the clear protections established by N.C. Gen. Stat. 22B-3, which prevents businesses from using standard terms to bypass state court jurisdiction. Opponents of such statutes often argue that these laws limit the freedom of sophisticated commercial entities to negotiate their own dispute resolution terms.

This decision reinforces that businesses forming contracts within North Carolina cannot easily offload their legal disputes to other states via vague website terms. For local companies, it serves as a reminder to ensure all purchase agreements explicitly identify the governing terms of service.

The takeaway

Contracts that reference external standard terms must be precise to be enforceable in court. Companies should ensure that all legal forum requirements are clearly integrated into the primary agreement to avoid disputes over jurisdiction.