The Supreme Court refused to adopt the Court of Appeals’ determination that non-negotiated forum selection clauses are unenforceable simply because there was a lack of bargaining. In arriving at this conclusion, the Supreme Court looked at the impracticability of every passenger negotiating separate terms of Carnival’s forum selection clause. The Ninth Circuit’s refusal to enforce the clause would have the effect of opening Carnival up to litigation in many different venues. since the cruise line typically carries passengers from a variety of locales.
Additionally, the court determined, that passengers who purchased tickets containing the forum selection clause actually derived benefit from the clause since it had the tendency to reduce fares because the savings that Carnival enjoyed by limiting the fora could be passed on to the consumer. Additionally, since the respondents did not claim that they were improperly notified about the clause or induced into entering the agreement by fraud. there was no legitimate reason to deny its effect.