Choice of forum clauses after Law No. 14,879/2024: what has changed and the controversy over its application

Law No. 14,879, enacted on June 4, 2024, amended provisions of the Brazilian Code of Civil Procedure relating to a common practice in both legal and business contexts: the so-called choice of forum clause.

Traditionally, the Brazilian procedural system distinguishes between two types of jurisdiction: relative and absolute. The former relates to the interests of the parties, while the latter derives from public interests connected to the proper allocation and organization of judicial authority by the State.

Territorial jurisdiction—that is, the place where a lawsuit is to be filed—has always been considered a classic example of relative jurisdiction. For this reason, the Code of Civil Procedure originally allowed the parties to choose such venue by agreement.

Accordingly, when entering into a contract, it has been common practice for the parties to define in advance the venue where any disputes would be resolved. In other words, the parties would select the judicial district responsible for adjudicating potential future controversies arising from that transaction.

Law No. 14,879 has altered this framework, which had until then been largely grounded in the principle of party autonomy. Under the new rule, a choice of forum clause will only be deemed valid if there is a connection with the domicile or residence of the parties, or with the place where the obligation is to be performed—except in consumer law matters, where the choice of forum remains valid if it is favorable to the consumer.

This legislative change was motivated by an effort to prevent the excessive concentration of cases in certain courts perceived as more efficient or predictable, which were frequently selected in contractual forum selection clauses.

Law No. 14,879 has also given rise to a relevant issue that is already reaching the courts: does the new rule apply to contracts executed prior to the law’s entry into force, but in relation to which legal proceedings were initiated afterward?

On the one hand, the Federal Constitution provides that the law shall not impair what is known as a “perfect legal act,” that is, an act validly performed in the past in accordance with the law then in force. On the other hand, Brazilian procedural law follows the principle that procedural rules apply immediately, subject to the preservation of procedural acts already performed.

The Superior Court of Justice, responsible for ensuring uniform interpretation of federal legislation, has already addressed the issue—albeit not as the central matter—in Conflict of Jurisdiction No. 206,933. On that occasion, the Court held that jurisdiction is determined at the time the action is filed, rendering “irrelevant the date on which the procedural agreement was executed.”

At the São Paulo State Court of Appeals, however, there is still no consensus. Some decisions follow the reasoning indicated by the Superior Court of Justice, while others hold that the new law should not affect contracts entered into prior to its enactment.

While this debate remains unresolved, contracting parties face a degree of legal uncertainty regarding a naturally sensitive issue. 

This is because the choice of forum is not merely a formal detail. A forum selection clause is part not only of the legal structure of a contract, but also of its economic framework. It affects risk assessment, the costs of potential litigation, physical proximity to legal counsel, and even the parties’ procedural strategy.

For this reason, the issue goes beyond a strictly procedural matter and also touches upon trust in the legal and business environment. As the concept of a “perfect legal act” is constitutionally protected, the Federal Supreme Court may ultimately be called upon to rule on the matter—potentially impacting the speed of resolution and further contributing to the current scenario of legal uncertainty.

The manner in which the courts resolve this tension will define not only the practical scope of Law No. 14,879/2024, but also the level of stability that the Brazilian legal system affords to procedural agreements entered into under the principle of private autonomy.