When out-of-state contractors come into another state to perform work, they frequently bring with them contract clauses requiring any litigation or arbitration to be conducted on their home turf instead of the jurisdiction of the job site. Earlier this year, Illinois joined several other states in enacting a statute declaring such anti-forum selection clauses to be unenforceable.
The Illinois statute says that any contract clause that makes the construction contract for an Illinois project subject to the laws of another state or requires any litigation or arbitration to be resolved in another state violates Illinois' public policy. The statute expressly does not apply to construction contracts awarded by the U.S. or any other state.
There are cases around the country, however, which say that such statutes may not be enforceable when the Federal Arbitration Act applies or in cases pending in the federal court system. The theory is that the federal statute preempts the state statute.
