## Facts

- William Donovan executed a promissory note in connection with an investment transaction and arranged for a financial guarantee bond from Northwestern National Insurance Company to secure the lender.
- As a condition of issuing the bond, Northwestern required Donovan to sign a short, standard-form indemnity agreement obligating him to reimburse Northwestern for losses it incurred as surety.
- The indemnity agreement contained a forum-selection clause requiring litigation arising from the bond/indemnity to be brought in Wisconsin.
- The underlying venture defaulted, and Northwestern paid under the financial guarantee.
- Northwestern sued Donovan in federal court in Wisconsin to recover its payment under the indemnity agreement.
- Donovan moved to dismiss for lack of personal jurisdiction, contending Wisconsin courts could not exercise jurisdiction over him despite the forum-selection clause.
- The district court declined to enforce the forum-selection clause and dismissed the action for lack of personal jurisdiction.

## Issues

1. Whether a forum-selection clause in a standard-form surety indemnity agreement designating Wisconsin is enforceable against the indemnitor.
2. Whether the indemnitor’s contractual consent to litigate in Wisconsin is sufficient to establish (or waive objections to) personal jurisdiction in Wisconsin federal court.
3. Whether the district court erred by refusing to enforce the forum-selection clause and dismissing for lack of personal jurisdiction.

## Decision

- The Seventh Circuit reversed the dismissal and remanded for further proceedings.
- The court held the Wisconsin forum-selection clause was valid and enforceable in this commercial setting.
- By agreeing to the clause, Donovan consented to litigate in Wisconsin and could not defeat jurisdiction by asserting ordinary due process objections absent a strong showing of unfairness.

## Legal Principles

- A party may consent by contract to personal jurisdiction in a designated forum through a forum-selection clause.
- Forum-selection clauses in commercial contracts are generally enforceable unless the resisting party shows fraud, overreaching, or that enforcement would be unreasonable or fundamentally unfair.
- A signer is ordinarily bound by the written terms of an agreement, including standard-form provisions, even if the signer did not read or subjectively focus on a specific clause.
- The use of boilerplate does not, by itself, render a forum-selection clause unenforceable, particularly when the contracting party is commercially sophisticated.

## Conclusion

The Seventh Circuit held that the Wisconsin forum-selection clause in the surety indemnity agreement was enforceable and that Donovan’s contractual consent supplied personal jurisdiction in Wisconsin, requiring reinstatement of the insurer’s reimbursement action.


Northwestern Nat’l Ins. Co. v. Donovan, 916 F.2d 372 (7th Cir. 1990)