Karon v. Elliott AviationAnnotate this Case
The Supreme Court affirmed the order of the district court dismissing this action presenting the question of what must be shown to avoid the effects of a contractual forum-selection clause, holding that fraud in general is not sufficient and must relate specifically to the forum-selection clause itself.
This case involved an alleged scheme to inflate the purchase price of a general aviation jet aircraft. Plaintiffs argued that Defendants fraudulently misrepresented the acquisition price of the aircraft and failed to disclose the true acquisition price. Defendants filed a motion to dismiss, asserting, in part, improper venue based on the forum-selection clause in the purchase agreement. The district court dismissed the case without prejudice based on improper venue. The Supreme Court affirmed, holding that because Plaintiffs did not allege fraud with respect to the forum-selection clause in the written contract, Plaintiffs' general allegations of fraud in the inducement were insufficient to avoid enforcement of the forum-selection clause of the purchase agreement.