Non‑Signatories and Forum‑Selection Clauses in Arizona: Henderson v. Moskowitz/Sullivan Rejects the Closely Related Party Doctrine

Non‑Signatories and Forum‑Selection Clauses in Arizona: Henderson v. Moskowitz/Sullivan Rejects the Closely Related Party Doctrine

I. Introduction

In Henderson v. Hon. Moskowitz / Sullivan, No. CV‑24‑0215‑PR (Ariz. Nov. 28, 2025), the Arizona Supreme Court squarely addressed whether a person who did not sign a contract can nonetheless enforce its forum‑selection clause under the so‑called “closely related party doctrine.” The Court emphatically declined to adopt that doctrine for forum‑selection clauses under Arizona law. Instead, it reaffirmed traditional contract principles: non‑signatories may enforce contract rights only through established doctrines such as third‑party beneficiary, assumption, agency, alter ego/veil‑piercing, or equitable estoppel—not via a free‑floating “closely related party” theory.

The dispute arose out of a consulting engagement for “nomad capitalist” services. Rob Sullivan contracted with Nomad Capitalist USA, LLC (“Nomad”), an Arizona‑law governed agreement drafted by Nomad and its founder, Andrew Henderson. The contract contained a forum‑selection clause designating Hong Kong as the exclusive forum. Although Henderson signed the contract on behalf of Nomad, he did not sign or appear in his individual capacity in that clause.

When the relationship deteriorated, Sullivan sued both Nomad and Henderson in Arizona for breach of contract, unjust enrichment, and consumer fraud under Arizona’s Consumer Fraud Act (CFA), A.R.S. §§ 44‑1521–1534. Nomad successfully invoked the forum‑selection clause and was dismissed in favor of litigation in Hong Kong. Henderson, however, was denied similar relief because he was not a party to the contract. He then sought extraordinary relief, urging the courts to allow him, as a “closely related” non‑signatory, to enforce the forum‑selection clause and compel Sullivan to litigate in Hong Kong.

The Supreme Court rejected that invitation. It reaffirmed Arizona’s commitment to the plain language of contracts, its skepticism toward judicially created expansions of non‑signatory enforcement, and its strong policy in favor of consumer‑protection statutes. The opinion clarifies both contract drafting practices and the limits on how corporate principals and related individuals may rely on contractual forum‑selection clauses going forward.

II. Summary of the Opinion

Justice Bolick, writing for a unanimous court, held:

  • No closely related party doctrine in Arizona for forum‑selection clauses. The Court declined to adopt the doctrine (and its arbitration analogue, “alternative estoppel”) as a new common‑law exception allowing non‑signatories to enforce contract provisions.
  • Plain contract text governs who can invoke the forum clause. The forum‑selection clause by its terms applied only to “each party” to the contract. Henderson was not a party. By contrast, other provisions (indemnification and social‑media clauses) expressly named “Andrew Henderson,” demonstrating deliberate drafting choices. His omission from the forum clause was treated as intentional.
  • Existing non‑signatory doctrines are sufficient. The Court reaffirmed the limited, traditional exceptions by which non‑signatories may enforce contracts—incorporation by reference, assumption, agency, veil‑piercing/alter ego, equitable estoppel, and third‑party beneficiary—relying in part on its own decision in JTF Aviation Holdings Inc. v. CliftonLarsonAllen LLP, 249 Ariz. 510 (2020), and the U.S. Supreme Court’s decision in Arthur Andersen LLP v. Carlisle.
  • Third‑party beneficiaries must be explicit. Under Arizona law, a third‑party beneficiary must be expressly named or clearly identified in the contract. Adopting the closely related party doctrine would effectively circumvent that requirement.
  • Consumer fraud claims are not swept into a contract forum clause via a non‑signatory. Sullivan’s remaining claim against Henderson is under the CFA, a statutory cause of action independent of the contract. The Court refused to allow a non‑signatory to use a contract’s forum‑selection clause to shield himself from such statutory liability.
  • Judgment: Affirmed and remanded. The Supreme Court affirmed the superior court’s denial of Henderson’s motion to dismiss the consumer fraud claim and remanded for further proceedings.

III. Detailed Analysis

A. Factual and Procedural Background

1. The consulting agreement and forum‑selection clause

Nomad Capitalist USA, LLC offered Sullivan consulting services to help “internationalize [his] finances, freedom, and lifestyle”—including relocation, foreign citizenship, and offshore tax planning. Sullivan paid approximately $52,500 for these services.

Key contract features:

  • Governing law: Arizona law.
  • Forum‑selection clause: “Each party further consents to exclusive jurisdiction and venue in the jurisdiction of Hong Kong, S.A.R. China.”
  • Signature: Henderson signed the contract on behalf of Nomad only—i.e., in a representative, not personal, capacity.
  • Drafting control: The contract used Nomad’s standard form, drafted and tailored by Nomad and Henderson.

Notably, the contract expressly mentioned Henderson in two other provisions:

  • Indemnification clause: Sullivan agreed to indemnify, defend, and hold harmless Nomad, its employees, officers, contractors, “or other agent or representative, including Andrew Henderson personally.”
  • Social media clause: Sullivan acknowledged that staff members “(including Andrew Henderson)” generally do not accept personal social media requests.

These provisions became crucial to the Court’s interpretive analysis: they showed that when the parties wanted to protect Henderson personally, they knew how to do so explicitly.

2. Litigation in Arizona

After the relationship soured, Sullivan sued both Nomad and Henderson in Arizona superior court, alleging:

  • Breach of contract
  • Unjust enrichment
  • Consumer fraud under the Arizona Consumer Fraud Act (CFA), A.R.S. §§ 44‑1521–1534

Nomad and Henderson each moved to dismiss based on the Hong Kong forum‑selection clause.

  • As to Nomad: The trial court granted Nomad’s motion, holding that the forum‑selection clause applied to Sullivan’s claims against Nomad.
  • As to Henderson: The trial court denied Henderson’s motion with respect to the consumer fraud claim, reasoning that no Arizona authority allowed a non‑signatory to invoke a forum‑selection clause in this way. It did, however, dismiss Sullivan’s contract‑based claims against Henderson, leaving only the CFA claim.

3. Special action and Supreme Court review

Henderson pursued a special action in the court of appeals seeking dismissal of the CFA claim based on the forum‑selection clause; that court declined jurisdiction. He then petitioned the Arizona Supreme Court.

On review, Henderson advanced two related theories (which the parties and the Court treated as doctrinally equivalent):

  • The “closely related party doctrine” (primarily used in forum‑selection clause cases), and
  • “Alternative estoppel” (a label often used in arbitration‑clause cases).

He argued that:

  • He was a “closely related” party because the contract was intended to benefit him and shield him from personal litigation.
  • All the allegedly fraudulent statements and unjust enrichment were “intimately bound up with” the contract, so Sullivan’s suit should be subject to the contract’s forum‑selection clause even against him personally.

Sullivan responded that:

  • The clause by its terms bound only “each party,” and Henderson was not a party.
  • The contract demonstrates that when Nomad and Henderson wanted to extend provisions to him personally, they did so expressly; the omission of his name from the forum clause must be treated as deliberate.
  • Arizona already recognizes several equitable doctrines (third‑party beneficiary, alter ego, etc.) that allow non‑signatories to enforce or be bound by contracts; importing a broad, vague, closely related party doctrine would undermine those clear rules.

The Supreme Court accepted review because the question of whether to adopt the closely related party doctrine presented a matter of statewide importance. Jurisdiction was based on Ariz. Const. art. 6, § 5(3).

B. Precedents Cited and Their Influence

The Court’s analysis is framed and constrained by a dense network of Arizona and federal precedents. Key groups of authorities are as follows.

1. Cases on contract interpretation and review standard

  • Sw. Non‑Profit Hous. Corp. v. Nowak, 234 Ariz. 387 (2014) – Cited for the proposition that interpretation of a contract is a question of law, reviewed de novo.
  • Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148 (1993) – Supports the proposition that contract construction and related defenses are questions of law.
  • Zambrano v. M. & R.C. II, Ltd., 254 Ariz. 53 (2022) – Emphasizes Arizona’s “strong protections and common law tradition of freedom of contract,” which undergirds the Court’s reluctance to expand obligations or benefits beyond what the contract’s text provides.
  • Teufel v. Am. Fam. Mut. Ins. Co., 244 Ariz. 383 (2018) – Cited for the principle that contract language is interpreted in accord with its “plain and ordinary meaning.”

These cases collectively establish that the Court will:

  • Interpret the contract’s language directly,
  • Respect the parties’ freedom to allocate rights and obligations, and
  • Review whether Henderson can enforce the clause as a pure question of law, without deference to the trial court’s reasoning.

2. Exceptions allowing non‑signatories to enforce contracts

  • Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc., 218 Ariz. 574 (2008) – A baseline reference confirming that, absent an exception, non‑signatories generally cannot enforce contract provisions.
  • JTF Aviation Holdings Inc. v. CliftonLarsonAllen LLP, 249 Ariz. 510 (2020) – A key precedent listing “six common law exceptions” under which non‑signatories may enforce contracts: incorporation by reference, assumption, agency, veil‑piercing/alter ego, equitable estoppel, and third‑party beneficiary. – In JTF Aviation, the Court also expressly declined to adopt the closely related party doctrine in the context of contractual limitations periods and approvingly cited the court of appeals’ rejection of that doctrine in the forum‑selection context.
  • Sierra Tucson, Inc. v. Bergin, 239 Ariz. 507 (App. 2016) – The court of appeals there rejected applying the closely related party doctrine to a forum‑selection clause, relying on the general rule that only parties to a contract are bound by its terms. The Supreme Court cites this to show consistent Arizona skepticism toward the doctrine.
  • Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) – The U.S. Supreme Court recognized that traditional state‑law principles (assumption, veil‑piercing, alter ego, incorporation by reference, third‑party beneficiary theories, waiver, and estoppel) govern when non‑signatories can enforce arbitration agreements. Arizona adopts the same conceptual framework for contracts generally.

By invoking these authorities, the Court signals that:

  • There is already a well‑defined set of doctrines that govern non‑signatory enforcement.
  • The closely related party doctrine is unnecessary and would disrupt a coherent existing system.

3. Contract‑interpretation canons and deliberate drafting

  • Hancock v. O’Neil, 253 Ariz. 509 (2022) and Scalia & Garner, Reading Law: The Interpretation of Legal Texts (2012) – The Court invokes the canon expressio unius est exclusio alterius (or “negative implication”): when a text explicitly includes one thing, it implies the exclusion of what is not listed. – Applied here, the explicit inclusion of “Andrew Henderson personally” in the indemnification clause, and “Andrew Henderson” in the social media clause, implies that his omission from the forum‑selection clause was deliberate.

This canon is central to the Court’s interpretive move: it transforms the seemingly neutral fact that Henderson was not named in the forum clause into affirmative evidence that the parties did not intend him to benefit from it personally.

4. Caution against new common‑law doctrines

  • 1800 Ocotillo, LLC v. WLB Grp., Inc., 219 Ariz. 200 (2008) – The Court declined to adopt a new contract rule in that case, emphasizing that courts should primarily apply existing common‑law and statutory principles.
  • Quiroz v. ALCOA Inc., 243 Ariz. 560 (2018) – Reiterates that Arizona courts generally do not create new common‑law duties absent legislative guidance.

These cases support the Court’s institutional restraint: it is reluctant to manufacture new theories—such as the closely related party doctrine—without clear statutory or common‑law grounding, especially when the doctrine could substantially expand contractual obligations and defenses.

5. Corporate separateness and alter ego

  • Chapman v. Field, 124 Ariz. 100 (1979) (quoted in JTF Aviation) – The Court recalls its admonition that “the corporate status will not be lightly disregarded.”
  • Sun Valley Ranch 308 Ltd. P’ship ex rel. Englewood Props., Inc. v. Robson, 231 Ariz. 287 (App. 2012) – In that case, when a plaintiff sued an individual as an alter ego of a contracting entity, the court allowed that individual, as a non‑signatory, to compel arbitration to the same extent as the corporate party. – Henderson relied on this kind of logic. The Supreme Court distinguishes Sun Valley Ranch on two grounds:
    • The plaintiff there effectively invited the defendant to “step into the shoes” of the contracting party by pleading alter ego; here, Sullivan sues Henderson for his personal statutory misconduct, not as Nomad’s alter ego.
    • Arizona has a particularly strong policy favoring arbitration, which does not extend in the same way to forum‑selection clauses when they are invoked to defeat state consumer‑fraud enforcement.

6. Arbitration policy contrasted with consumer‑protection policy

  • North Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301 (2004) and Hamblen v. Hatch, 242 Ariz. 483 (2017) – Both underscore Arizona’s strong public policy “favoring arbitration” as an efficient means of dispute resolution.
  • Arizona Consumer Fraud Act (CFA): A.R.S. §§ 44‑1521–1534, and
    • Sellinger v. Freeway Mobile Home Sales, Inc., 110 Ariz. 573 (1974) – Recognizes a private right of action to enforce the CFA.
    • State ex rel. Woods v. Sgrillo, 176 Ariz. 148 (App. 1993) – Notes Arizona’s strong interest in enforcing its consumer‑protection laws.
    • State ex rel. Babbitt v. Goodyear Tire & Rubber Co., 128 Ariz. 483 (App. 1981) – Emphasizes that the CFA’s purpose is to protect the public from deceptive acts.

These authorities permit the Court to say:

  • In arbitration contexts, strong policy may justify somewhat broader enforcement mechanisms (e.g., Sun Valley Ranch),
  • But the same deference is inappropriate where a non‑signatory uses a forum clause to evade Arizona’s consumer‑fraud regime.

7. Fraud independent of contract

  • Morris v. Achen Constr. Co., Inc., 155 Ariz. 512 (1987) – Critical for distinguishing contract and tort (or statutory) duties: “The duty not to commit fraud is obviously not created by a contractual relationship and exists, as here, even when there is no contractual relationship between the parties at all.”
  • Bennett v. Appaloosa Horse Club, 201 Ariz. 372 (App. 2001) – Held that a fraud claim could not be litigated separately from a contract claim where both arose from the same alleged contract violation and the contract contained a forum clause. The Supreme Court notes that while such a question can be considered by the trial court, here:
    • The alleged fraud occurred prior to contract formation, and
    • The fraud claim is against a non‑signatory.

Morris supports treating the CFA claim as analytically separate from the contract; Bennett is distinguished as involving a signatory defendant and a fraud claim tethered to the same alleged contract breach.

8. Federal criticism of the closely related party doctrine

  • Franlink Inc. v. BACE Servs., Inc., 50 F.4th 432 (5th Cir. 2022) – Catalogues the numerous, often conflicting factors federal courts have used to decide whether a non‑signatory is “closely related”: common ownership, involvement in negotiations, signatory status of the opposing party, the type of claims at issue, secret control, posture of the case, direct benefits received, awareness of the agreement, and foreseeability that the party would be bound. The Fifth Circuit expresses “good reason to be dubious” of the doctrine’s coherence.
  • Dos Santos v. Bell Helicopter Textron, Inc., 651 F. Supp. 2d 550 (N.D. Tex. 2009) – Describes the doctrine as “so vague as to be unworkable.”
  • Firexo, Inc. v. Firexo Group Ltd., 99 F.4th 304 (6th Cir. 2024) – The Sixth Circuit rejects the closely related party doctrine outright, characterizing it as “a judicial concoction without underlying authority or justification” that “appeared ipse dixit and continues to exist primarily because no court has rejected it.”

The Arizona Supreme Court relies on this growing federal skepticism to bolster its own refusal to adopt the doctrine. It signals that Arizona is aligning with a trend of courts questioning the doctrine’s legitimacy and workability.

9. Third‑party beneficiary doctrine

  • Norton v. First Fed. Sav., 128 Ariz. 176 (1981) (quoting Irwin v. Murphey, 81 Ariz. 148 (1956)) – Establishes that to qualify as a third‑party beneficiary, a person must be the intended beneficiary of the contract, and that intent must be clear from the contract itself.
  • Sherman v. First Am. Title Ins. Co., 201 Ariz. 564 (App. 2002) – Echoes that third‑party beneficiary rights must be clearly and explicitly conferred.

The Court uses these precedents to stress that:

  • Arizona requires explicit designation of third‑party beneficiaries, not merely “foreseeable” benefit or “close relationship.”
  • Adopting the closely related party doctrine—which rests largely on foreseeability and relationship factors—would conflict with these settled rules.

C. The Court’s Legal Reasoning

1. Plain meaning and structural inference from the contract

The Court begins with straightforward contract interpretation:

  • The forum‑selection clause binds “each party.” Henderson is not a party to the contract in his individual capacity.
  • Elsewhere, the contract explicitly includes “Andrew Henderson personally” in the indemnification clause and “Andrew Henderson” in the social media clause.

Applying the expressio unius / negative‑implication canon, the Court reasons:

When a contract expressly includes a named individual in some clauses but omits that same person from other, similarly structured clauses, the omission is presumed deliberate.

Thus, Henderson’s absence from the forum clause is treated as an intentional decision by the drafters (which included Henderson himself). The Court underscores how easily the contract could have extended the forum clause to him: “a few strokes of the keyboard” would have sufficed. That they were not used makes Henderson’s claim for coverage “a tall order.”

2. Reaffirming limited avenues for non‑signatory enforcement

The Court then reiterates the general rule: non‑signatories cannot enforce contract provisions unless they fit within recognized exceptions. Citing JTF Aviation and Arthur Andersen, the Court lists the accepted theories:

  • Incorporation by reference
  • Assumption
  • Agency
  • Veil‑piercing / alter ego
  • Equitable estoppel
  • Third‑party beneficiary

Henderson did not timely develop any of these theories before the Supreme Court. At oral argument, his counsel raised a third‑party beneficiary theory, but:

  • The Court did not grant review on that question, and
  • The argument was not properly developed.

Thus, the only live issue before the Court was whether to add yet another, broader exception—the closely related party doctrine—on top of the existing list. The Court declines.

3. Rejection of the closely related party doctrine

The Court’s rejection is grounded in several concerns:

  1. Lack of Arizona precedent and conflict with existing doctrine. Arizona had not previously adopted the doctrine, and existing case law (JTF Aviation, Sierra Tucson) had already expressed disfavor toward it. Moreover, allowing non‑signatories to enforce clauses based merely on being “closely related” would:
    • Undermine the third‑party beneficiary rule requiring explicit contractual designation, and
    • Weaken Arizona’s strong presumption of corporate separateness (see Chapman and JTF Aviation).
  2. Doctrinal vagueness and unpredictability. The doctrine relies on a sprawling, indeterminate set of factors (as catalogued in Franlink): ownership ties, negotiation role, awareness of the agreement, types of claims, direct benefits, “foreseeability,” and more. Different courts weigh these factors differently, generating inconsistent results. The Court notes with approval:
    • The Fifth Circuit’s skepticism (“good reason to be dubious”), and
    • The Sixth Circuit’s condemnation of the doctrine as a “judicial concoction” that appeared ipse dixit and persists mostly because courts had not yet rejected it.
    Together with Dos Santos (calling it “so vague as to be unworkable”), these criticisms support Arizona’s refusal to embrace a poorly defined and easily manipulable theory.
  3. Judicial restraint and deference to existing law. Consistent with 1800 Ocotillo and Quiroz, the Court emphasizes that its proper role is to apply, not radically expand, common‑law doctrines absent legislative direction, particularly where legislative policy (e.g., consumer‑protection) would be compromised.

In sum, the Court concludes that the closely related party doctrine is both unnecessary and incompatible with Arizona’s settled contract and third‑party beneficiary rules.

4. Distinguishing arbitration cases and alter ego scenarios

Henderson’s reliance on arbitration cases—especially Sun Valley Ranch—did not persuade the Court. Two critical distinctions were highlighted:

  1. Pleading alter ego vs. individual statutory liability. In Sun Valley Ranch, the plaintiff itself used an alter ego theory to treat the individual as indistinguishable from the contracting entity. That effectively invited the individual to invoke the contract’s arbitration clause “to the same extent” as the corporate party. By contrast:
    • Sullivan is not alleging that Henderson is Nomad’s alter ego.
    • He is suing Henderson for his own conduct, under an independent statute (the CFA).
    Therefore, the rationale of Sun Valley Ranch—which rests on the plaintiff’s own choice to collapse corporate separateness—does not apply.
  2. Different policy weight: arbitration vs. forum‑selection for statutory claims. Arizona has a “strong public policy favoring arbitration” (North Valley Emergency Specialists; Hamblen). That policy sometimes justifies broad enforcement of arbitration provisions, even by non‑signatories under conventional doctrines. By contrast, no equivalent policy favors extending contractual forum‑selection clauses to allow non‑signatories to defeat statutory consumer‑fraud claims. If anything, public policy cuts the other way, supporting robust enforcement of the CFA.

The Court thus refuses to analogize from arbitration law to forum‑selection clauses in a way that would erode consumer‑protection enforcement.

5. Consumer fraud claims as independent statutory obligations

The Court next addresses the nature of Sullivan’s remaining claim—consumer fraud under the CFA:

  • A.R.S. § 44‑1522(A) makes unlawful false promises or representations made in connection with the sale or advertisement of “merchandise,” including services (A.R.S. § 44‑1521(5)).
  • Sellinger confirms a private right of action for individuals injured by violations of the CFA.
  • Cases such as Woods v. Sgrillo and Babbitt v. Goodyear emphasize that Arizona has a strong interest in protecting the public from deceptive business practices.

Crucially, Morris v. Achen Constr. establishes that:

“The duty not to commit fraud is obviously not created by a contractual relationship and exists, as here, even when there is no contractual relationship between the parties at all.”

Applying these principles, the Court reasons:

  • The CFA claim against Henderson arises from an independent statutory duty not to engage in deceptive conduct in trade; it is not merely a re‑labeled contract claim.
  • The claim appears to be based on alleged misrepresentations prior to contract formation, and it is asserted against a non‑signatory.
  • Accordingly, Bennett, which kept a fraud claim tethered to a contract claim subject to a forum clause, is distinguishable both in timing (fraud tied to breach vs. pre‑contract fraud) and in the defendant’s status (signatory vs. non‑signatory).

The Court therefore declines to let a non‑signatory (Henderson) use a contract’s forum‑selection clause to shield himself from a statutory claim that exists irrespective of the contract.

6. Addressing fairness, efficiency, and “superfluous” claims

Henderson advanced practical and equitable arguments:

  • It is inefficient and unfair to allow parallel proceedings—contract claims against Nomad in Hong Kong and consumer‑fraud claims against him in Arizona—arising from the same factual dispute.
  • The CFA claim is “superfluous” if the core of the dispute is contractual.

The Court was unpersuaded, for several reasons:

  1. Contract drafting choices control. Henderson could have easily added himself to the forum‑selection clause when drafting the contract, as he did in other provisions. Courts will not re‑write clear contract language in the name of ex post efficiency.
  2. Equity does not favor a one‑sided expansion. Although Henderson frames his argument in terms of fairness, allowing him to “clothe himself in contract benefits” (including those clauses that do not mention him) to escape personal statutory liability would create its own inequities, particularly for consumers.
  3. Procedural safeguards exist. The Court notes that Henderson retains ordinary procedural tools in Arizona to combat meritless claims:
    • Rule 9(b) (heightened pleading for fraud),
    • Rule 12(b)(6) (motion to dismiss for failure to state a claim),
    • Rule 11 (sanctions for frivolous filings), and
    • Rule 56 (summary judgment).
    These mechanisms, coupled with existing doctrines such as alter ego and third‑party beneficiary (if properly pleaded and proven), are sufficient to address the concerns Henderson raises.
  4. Prematurity of “superfluous” argument. The Court observes that whether the CFA claim is “superfluous” cannot be determined at this early stage. That assessment is for the trial court on a properly developed record.

Accordingly, efficiency concerns do not justify the doctrinal leap Henderson requests.

D. Impact of the Decision

1. Clarified rule: non‑signatories and forum‑selection clauses in Arizona

The core precedent established is clear:

  • Arizona does not recognize the closely related party doctrine for forum‑selection clauses.
  • Non‑signatories may only enforce such clauses through established, traditional doctrines (assumption, agency, alter ego/veil‑piercing, incorporation by reference, equitable estoppel, and third‑party beneficiary).
  • Third‑party beneficiary status requires explicit or clearly evident intent in the contract text. Mere foreseeability that a person might benefit or be affected is insufficient.

Future non‑signatory defendants seeking to invoke a forum‑selection clause in Arizona must now anchor their arguments firmly in these recognized doctrines, rather than relying on generalized “close relationship” or fairness theories.

2. Contract drafting implications

For lawyers and businesses drafting contracts governed by Arizona law, this case has concrete implications:

  • Express inclusion is essential. If owners, officers, employees, or affiliates are meant to share in a forum‑selection clause’s protections, they must be expressly named or clearly covered. For example:
    • “This forum‑selection clause applies to and may be invoked by the Company, its officers, directors, employees, agents, and affiliates, including [specific individuals].”
  • Consistency across clauses matters. When a contract expressly identifies an individual in some clauses but not others, courts may infer intentional exclusion. Drafters should carefully harmonize how they treat individuals across indemnity, limitation‑of‑liability, arbitration, and forum‑selection clauses.
  • Be mindful of statutory claims. While parties can allocate forum and law for contract disputes, this decision underscores that statutory claims—especially consumer‑protection claims—may resist such allocation, particularly when asserted against non‑signatories.

3. Effects on corporate principals and related individuals

Corporate founders, officers, and managers who sign contracts solely in a representative capacity can no longer assume that:

  • They will be able to piggy‑back on the entity’s forum‑selection clause merely because they are “closely related” to the entity or the transaction, or
  • Courts will extend forum‑selection protection based on practical concerns about duplicative proceedings.

Instead:

  • If such individuals want the same venue protections as the entity, they must ensure the contract says so.
  • If plaintiffs sue them personally under independent statutory or tort theories, they should expect Arizona courts to carefully distinguish between contract‑based and statutory claims.

4. Consumer‑protection and private enforcement of the CFA

For consumers and their counsel, the decision reinforces that:

  • The CFA is a robust, independent vehicle for relief, not easily displaced by private contractual arrangements.
  • Even where a contract specifies an exclusive foreign forum, individual defendants who are not parties to the contract may still be subject to CFA claims in Arizona courts.
  • Allegations of pre‑contract misrepresentations or deceptive practices can, in appropriate circumstances, be litigated separately from pure contract claims, especially where different parties (e.g., non‑signatory individuals) are involved.

The decision thus strengthens the practical enforceability of Arizona’s consumer‑fraud laws in cross‑border or multi‑party commercial arrangements.

5. Relationship to arbitration law going forward

The Court is careful not to overrule or diminish Arizona’s strong policy favoring arbitration; it distinguishes rather than disapproves decisions like Sun Valley Ranch. Accordingly:

  • The ruling is most directly about forum‑selection clauses, not arbitration clauses.
  • However, its skepticism about creating new, unanchored non‑signatory doctrines (like closely related party / alternative estoppel) may inform future cases involving non‑signatory enforcement of arbitration agreements as well.
  • Courts and litigants should expect close scrutiny of any attempt to expand non‑signatory enforcement beyond the established set of doctrines in JTF Aviation and Arthur Andersen.

IV. Complex Concepts Simplified

1. Forum‑selection clause

A forum‑selection clause is a clause in a contract where the parties agree in advance where (which court, in which place) any disputes will be litigated. For example, “Any dispute arising out of or relating to this Agreement shall be brought exclusively in the courts of Hong Kong.”

In Henderson, the clause stated: “Each party further consents to exclusive jurisdiction and venue in the jurisdiction of Hong Kong, S.A.R. China.” It bound only the “parties” to the contract—Sullivan and Nomad—not Henderson personally.

2. Non‑signatory

A non‑signatory is someone who did not sign the contract and is not formally identified as a contractual “party.” They may still be connected to the transaction (e.g., a company’s CEO, an affiliate, a third‑party service provider), but they are not themselves parties in the strict contractual sense.

Generally, non‑signatories cannot enforce or be bound by contract terms unless a recognized legal doctrine brings them within the contract’s scope.

3. Closely related party doctrine

Under the closely related party doctrine (recognized in some other jurisdictions), courts may allow a person who did not sign a contract to enforce a forum‑selection clause if:

  • The person is “closely related” to a signatory or to the dispute, and
  • It was “foreseeable” that the signatory would be bound to litigate claims involving that non‑signatory in the chosen forum.

Courts invoking this doctrine look at factors like ownership ties, control of the contractual relationship, whether the non‑signatory received benefits under the contract, and whether the plaintiff’s claims are closely bound up with the contractual obligations.

In Henderson, the Arizona Supreme Court refused to adopt this doctrine, calling it vague, unmoored from established principles, and in tension with Arizona’s rules on third‑party beneficiaries and corporate separateness.

4. Third‑party beneficiary

A third‑party beneficiary is someone who, while not a party to the contract, is intended by the contract’s signatories to receive direct benefits from the contract and to have enforceable rights under it.

In Arizona:

  • The contract must show clear intent to benefit the third party.
  • Often, the third party is explicitly named or clearly described.
  • Mere incidental benefit is not enough.

In Henderson, although some contract clauses expressly benefitted “Andrew Henderson personally” (e.g., indemnification), the forum‑selection clause did not. Thus, Henderson could not claim to be a third‑party beneficiary of that clause.

5. Alter ego and veil‑piercing

Alter ego and veil‑piercing doctrines allow courts, in exceptional circumstances, to disregard the separate legal existence of a corporation or LLC when:

  • The individual so dominates and controls the entity that they are effectively the same, and
  • Recognizing the entity’s separate existence would promote fraud or injustice.

If a court finds alter ego, it may:

  • Hold the individual liable for the entity’s contractual obligations, and
  • Allow the individual to enforce rights under the contract to the same extent as the entity (as in Sun Valley Ranch).

In Henderson, Sullivan did not sue Henderson as Nomad’s alter ego. He pursued a statutory claim against Henderson personally. Accordingly, alter‑ego principles did not justify extending the forum‑selection clause to Henderson.

6. Expressio unius est exclusio alterius (negative implication)

This Latin maxim means: “the expression of one thing implies the exclusion of another.” In contract interpretation, it works like this:

  • If a clause lists specific persons or items, courts infer that unlisted persons or items are deliberately excluded.

Here:

  • The contract expressly listed “Andrew Henderson personally” in the indemnification clause and “Andrew Henderson” in the social media clause.
  • His name did not appear in the forum‑selection clause.

Under the expressio unius principle, the Court treated this omission as a deliberate decision not to extend the forum‑selection clause’s protection to Henderson individually.

7. Consumer Fraud Act (CFA) claims vs. contract claims

A CFA claim under A.R.S. § 44‑1522(A) alleges that a person used deception, false promises, misrepresentations, or similar conduct in connection with the sale or advertisement of merchandise or services. This duty arises from statute, not from any contract.

A contract claim alleges breach of a promise made in a contract (e.g., failure to perform as agreed).

The key distinction:

  • Contractual duties are created by agreement between the parties.
  • Statutory duties are created by law and may exist even where no contract exists, or between parties who never contracted with each other.

In Henderson, the Court treated the CFA claim as an independent statutory claim, not merely a contract dispute in disguise. Therefore, a contract’s forum‑selection clause, especially as invoked by a non‑signatory, could not automatically displace that statutory cause of action.

V. Conclusion

Henderson v. Moskowitz/Sullivan establishes a clear and consequential rule in Arizona contract law: non‑signatories cannot rely on the “closely related party” doctrine to enforce forum‑selection clauses. Instead, they must fit within the long‑recognized, narrowly defined doctrines for non‑signatory enforcement—assumption, agency, alter ego/veil‑piercing, incorporation by reference, equitable estoppel, or explicit third‑party beneficiary status.

The decision reinforces:

  • Arizona’s strong commitment to freedom of contract and plain‑meaning interpretation,
  • Judicial restraint in inventing new common‑law exceptions absent legislative direction,
  • The importance of precise and consistent contract drafting, especially when individuals seek to share in protections granted to entities, and
  • Robust enforcement of Arizona’s Consumer Fraud Act, ensuring that statutory duties to avoid deceptive practices are not easily evaded via private contract mechanisms—particularly by non‑signatories.

For practitioners, the case is both a warning and a guide: when drafting Arizona‑governed agreements, specify exactly who is bound and who may invoke forum‑selection and similar protective clauses. For litigants, it clarifies that attempts to stretch those clauses to cover non‑signatory individuals through imprecise “close relationship” theories will find no purchase in Arizona’s highest court.

Case Details

Year: 2025
Court: Supreme Court Of The State Of Arizona

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