Not Signing Agreement Containing Forum Selection Clause

In Lu v. Dryclean-U.S.A. of California, Inc. (1992) the plaintiffs argued that enforcement of a forum selection clause would be unreasonable because two of the defendants--the corporate parent and grandparent of the franchiser-signator to the agreement--did not sign the agreement containing the forum selection clause. The reviewing court was not persuaded: "A range of transaction participants, parties and non-parties, should benefit from and be subject to forum selection clauses." Here, the alleged conduct of the corporate parent and grandparent is closely related to the contractual relationship. They are alleged to have participated in the fraudulent representations which induced plaintiffs to enter into the Agreement. Indeed, plaintiffs go so far as to allege the corporate parent and grandparent are the 'alter ego' of Dryclean California, which did sign the Agreement containing the forum selection clause. Under these circumstances, the fact that they did not sign the Agreement does not render the forum selection clause unenforceable. To hold otherwise would be to permit a plaintiff to sidestep a valid forum selection clause simply by naming a closely related party who did not sign the clause as a defendant." ( Id. at p. 1494.)