Justice O'Connor on Contract Enforcement
From Judgepedia
In a 4-3 decision, Justice O'Connor concurred in the majority opinion, written by Justice Pfeifer, which concluded, over the vigorous dissents of Justices O'Donnell, Lanzinger, and Cupp, that a contract to pay a woman $20,000 to serve as a surrogate mother was not unconscionable or otherwise "void by public policy" and was therefore enforceable. The majority noted "a lack of a declared public policy for or against surrogacy contracts," and reasoned in a manner greatly deferential to the freedom of adults to enter into contracts, observing that "a written contract defining rights and obligations of the parties seems an appropriate way to enter into surrogacy agreement. If the parties understand their contract rights, requiring them to honor the contract they entered into is manifestly right and just."
In his dissent, Justice Cupp registered his belief that the contract, irrespective of whether it was voluntary, was "contrary to public policy and void." He also made the followiong remarks on the matter:
- "[T]he issue presented encompasses a socpe broader than simply whether any Ohio statute specifically and expressly bans gestational surrogacy. The real issue is whether the essential nature of the contract * * * runs contrary to the established public policy of this state * * *."
- "Public policy is difficult to define with accuracy [but] is the cornerstone-the foundation- of all Constitutions, statutes, and judicial decisions."
- "I conclude that the contract is contrary to public policies safeguarding children."
- "[I]t is impossible to so precisely separate the conduct of the parties and the object of the payment of money."
- "For [the plaintiff's] argument to be valid, it would be necessary to legally declare that the children do not have a mother. Such a position is untenable."
- "[Although] there is no evidence of improper motive or illicit purpose by any of the parties involved in this matter[,] It is equally clear that each of the parties fo the purported contract is acting out of self-interest * * *. The effect of the majority's holding would permit parties to such a pact to override and to write out the state's traditional oversight role."
- "Enforcing this contract, which is no less than the creation of a child, is likely to open Ohio to being an interstate, and perhaps international, marketplace for gestational surrogacy. * * * Without comprehensive rules of engagement for such activity, preferably prescribed by the legislature, it is not difficult to imagine a developing "marketplace" for multipart, multistate child production contracts."
- "[T]his court should not be an unwitting instrument to opening the door of this state to such an unregulated commercial enterprise."
- "A public policy much more important than money is involved here: the conception and nurturing of children is not just another commercial transaction."
In a 5-2 decision, Justice O'Connor concurred in the majority opinion, written by Justice Moyer, which invalidated, over the strong dissents of Justices Lundberg Stratton and Judith Ann Lanzinger, a contract with a clause that made the forum for bringing a lawsuit under the contract dependent upon the principal place of business of the party to whom the contract was assigned, in the event that it would be assigned. In doing so, the Majority acknowledged that there was no evidence of fraud, that the parties, both business entities, read and understood the agreement, and that enforcing the clause wouldn't deprive either of the parties of their day in court; but found that the clause was "unreasonable" because of a "strong public policy of not haling individuals into foreign jurisdictions without their knowing waiver."
In her dissent, Justice Lundberg Stratton registered the following objections:
- "[T]he majority fails to cite any sound public policy disfavoring the floating forum-selection clause at issue in this case."
- "[T]he majority goes on to hold that the forum-selection clause is unreasonable and against public policy simply because at the time they entered the contract, appellants did not know exactly where they might have to litigate their contract. Nonetheless, that is exactly the agreement the parties made. I see no sound public-policy reason to void the forum-selection clause agreed to by these commercial entities, when there was no fraud or overreaching and the parties were on notice that the contract contained a floating forum-selection clause."
- "The majority notes that this language was clear and was legibly printed on the second page of the two-page contract. There was no effort to conceal the clause. In fact, the majority notes that printed in large type and in all capital letters directly above the signature line of the guaranty on the front page of each contract is the sentence 'You agree to jurisdiction and venue as stated in the paragraph titled Applicable Law of the rental [agreement].'"
- “Absent evidence of fraud or overreaching, a forum selection clause contained in a commercial contract between business entities is valid and enforceable, unless it can be clearly shown that enforcement of the clause would be unreasonable and unjust. * * * [A]ppellants were aware of the possibility that their contract could be assigned and that, due to the floating forum-selection clause, an assignment could change the forum for litigation."
- "The majority acknowledges that there is a valid business reason for including a floating forum-selection provision. Such a clause is a reflection of the realities of the modern-day leasing industry, where negotiable paper involving equipment leasing is bought and sold with regularity. This reality favors a clause that permits an assignee to bring suit in its home forum, thereby enhancing the marketability of the lease. 'Parties to contracts are not benefited by rules that make assignment burdensome. If assignors have to compensate their assignees for having to litigate in an inconvenient forum, they will have to charge a higher price to their customers * * *.'”
- "* * * [T]he forum may change. That is part of the bargain agreed to by the parties."
- "The marketability of commercial paper is dependent on financial institutions being able to sell commercial paper freely. The majority's decision makes no sense in the modern market and will seriously undermine countless contracts with floating forum-selection clauses that have been entered into in Ohio and will reduce the value of commercial paper with such clauses that have been purchased by Ohio institutions."
