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Courage Co. v. Chemshare Corp – Case Brief Summary (Texas)

In Courage Co. v. Chemshare Corp., 93 S.W.3d 323 (Tex. App.--Houston 14th Dist. 2002, no pet.), the Fourteenth Court of Appeals considered the proper construction of "plainly inconsistent" forum selection and choice of law clauses that were included within two separate agreements that were executed by the same parties seven months apart. 93 S.W.3d at 332-33.

In analyzing the two conflicting agreements, the court noted that, under Texas law, "when a second contract deals with the same subject matter as the first contract made by the same parties, but does not specify whether or to what extent it is intended to operate in discharge or substitution," the contracts are to be "interpreted together, and to the extent that they are inconsistent, the later one prevails." Id.

Because the court found that the agreements pertained to the same subject matter and were "inextricably interwined," the court concluded that the parties intended for the subsequently-executed agreement "to supersede and to control." Id. at 335.

Based upon these legal principles, and after noting that the parties had failed to submit their disputes to arbitration in accord with the clauses in the subsequently-executed agreement, the court affirmed the trial court's order refusing to recognize a foreign country judgment that had been entered by a court outside the scope of the required arbitration proceedings. Id. at 336.