Choice of venue: Overview, definition, and example
What is choice of venue?
Choice of venue refers to the provision in a contract or legal agreement that specifies the location (or court) where any disputes or legal actions arising from the agreement will be resolved. This clause determines the jurisdiction or geographical location where the parties agree to bring any lawsuits, arbitrations, or other legal matters. It helps to establish clarity and certainty in case legal action is needed, ensuring that both parties are aware of where they must appear or submit legal matters.
For example, a contract between a company and a supplier might include a choice of venue clause that states that any legal disputes will be handled in a court located in a specific city or state.
Why is choice of venue important?
Choice of venue is important because it provides predictability and convenience in case of legal disputes. By agreeing on a particular location for resolving conflicts, both parties avoid the uncertainty of deciding where the case will be heard if a dispute arises. It can also help ensure that the legal system in that jurisdiction is familiar with the type of dispute being resolved.
For businesses, it may be strategically advantageous to choose a location with laws that are favorable to their position, or one where they have easier access to legal counsel and representation. For individuals or parties in a contract, a choice of venue clause can protect them from being forced to litigate in a distant or inconvenient location, which could be costly and time-consuming.
Understanding choice of venue through an example
Imagine a software company based in California signs a contract with a distributor in New York. The contract includes a choice of venue clause that states any legal disputes will be resolved in California courts. If a dispute arises, such as a breach of contract claim, both parties must resolve the issue in California, even though one party is located in New York. This helps ensure the legal process is clear and avoids potential disagreements over where the case should be heard.
In another example, a company may include a choice of venue clause in an international agreement, specifying that any disputes will be handled in an arbitration venue in London, regardless of where the parties are located. This ensures consistency and fairness by agreeing on a neutral location for both parties.
An example of choice of venue clause
Here’s how a choice of venue clause might appear in a contract:
“Any disputes arising out of or relating to this Agreement shall be resolved exclusively in the courts located in [City, State]. The parties agree to submit to the jurisdiction of such courts and waive any objections based on venue or forum non conveniens.”
Conclusion
Choice of venue is a crucial provision in contracts that specifies where legal disputes will be resolved. It helps provide certainty, reduces the potential for conflict, and ensures that both parties are aware of the jurisdiction where any legal matters will be heard. Whether for businesses or individuals, agreeing on the choice of venue upfront allows for smoother dispute resolution and can avoid complications and additional costs if legal action becomes necessary.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.