Instrumentation Associates, Inc. v. Madsen Electronics (Canada) Ltd.
United States Court of Appeals for the Third Circuit
859 F.2d 4 (1988)
- Written by David Bloom, JD
Facts
Madsen Electronics (Canada) Ltd. (Madsen) (defendant) was a Canadian supplier of audiological devices. Pursuant to a written agreement, Madsen gave Instrumentation Associates, Inc. (Instrumentation) (plaintiff), a Pennsylvania corporation, the exclusive right to distribute Madsen’s products in various states. The distributorship agreement was for an initial one-year term and was to be automatically renewed each year thereafter unless the parties gave at least three months’ written notice of termination. The agreement contained a forum-selection clause that provided that any disputes would be decided by a Canadian court, in accordance with the laws of Canada. Instrumentation sued Madsen in the United States District Court for the Eastern District of Pennsylvania, claiming that Madsen had wrongfully terminated the distributorship agreement. Madsen moved to dismiss the action based on the forum-selection clause. The district court denied the motion, reasoning that the provision choosing Canadian-law was too ambiguous to enforce because laws varied among Canadian provinces and thus that the entire clause, including its choice of forum, was unenforceable Madsen appealed.
Rule of Law
Issue
Holding and Reasoning (Hutchinson, J.)
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