Hall

In this case of first impression, we consider whether a choice of forum provision in a private California securities agreement is enforceable. Because the choice of law provision in the same agreement violates the Corporations Code and the public policy of this state, we hold enforcement of the choice of forum provision is unreasonable.

I

Thomas L. Hall and Lloyd C. Howard are California residents and officers of Thomas L. Hall Corporation, a California corporation. Imperial Petroleum, Inc. is apparently a Utah corporation. 1 In 1981 Imperial’s prin *414 cipal place of business was Laguna Hills, California; its principal officers and shareholders, Lloyd T. Rochford and Virden L. Parker, were California residents.

Hall and Howard were limited partners and Imperial the general partner in two California oil and gas limited partnerships. The 1979 agreement for one limited partnership is part of the record before us; it provides for the application of California law to settle any dispute arising out of the partnership.

In June and July 1981, the parties discussed exchanging the interests of Hall and Howard in one of the limited partnerships for 100,000 restricted shares of…

The only issue before this court is whether a forum selection clause appearing in a contract freely and voluntarily negotiated at arm’s length is enforceable. I would hold the forum selection clause in this case unenforceable but would do so on different grounds than those relied upon by the majority.

*420 I

“Forum-selection clauses have historically not been favored by American courts.” (The Bremen v. Zapata Off-Shore Co. (1972) 407 U.S. 1, 9 [ 32 L.Ed.2d 513, 520 , 92 S.Ct. 1907 ].) In the past they were held invalid as an attempt to “oust” the jurisdiction of the court by preventing it from hearing a case otherwise within its jurisdiction. (General Acceptance Corp. v. Robinson (1929) 207 Cal. 285, 289 [ 277 P. 1039 ]; Beirut Universal Bank v. Superior Court (1969) 268 Cal.App.2d 832, 843 [ 74 Cal.Rptr. 333 ]; General Motors Accept. Corp. v. Codiga (1923) 62 Cal.App. 117 [ 216 P. 383 ].) But in Smith, Valentino & Smith our Supreme Court had occasion to reconsider the general rule of invalidity in light of “the modern trend which favors enforceability of such forum selection clauses.” (Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 495 [ 131 Cal.Rptr.…

Buchalter, Nemer, Fields, Chrystie & Younger and Frank A. Conner for Real Parties in Interest.

OPINION

CROSBY, Acting P.J.

In this case of first impression, we consider whether a choice of forum provision in a private California securities agreement is enforceable. Because the choice of law provision in the same agreement violates the Corporations Code and the public policy of this state, we hold enforcement of the choice of forum provision is unreasonable.

Thomas L. Hall and Lloyd C. Howard are California residents and officers of Thomas L. Hall Corporation, a California corporation. Imperial Petroleum, Inc. is apparently a Utah corporation. [1] In 1981 Imperial's principal place of business was Laguna Hills, California; its principal officers and shareholders, Lloyd T. Rochford and Virden L. Parker, were California residents.

Hall and Howard were limited partners and Imperial the general partner in two California oil and gas limited partnerships. The 1979 agreement for one limited partnership is part of the record before us; it provides for the application of California law to settle any dispute arising out of the partnership.

In June and July 1981, the parties discussed…