Choice of Law and Choice of Venue Clauses: What Are They?

When drafting or negotiating business agreements many businesses overlook what are known as choice of law, or choice of venue provisions. These contractual provisions can make your life easier—or harder if someone else puts them into your contracts without knowing it.

Choice of Venue

A venue clause says that a case has to be filed in the state, in your county, in your judicial circuit, or in any court that you designate. Choice of venue can be an important step in making sure that if you sue or you are sued, you are located in a court that is convenient for you. This is especially important when your business does its business through the state of Florida, or even throughout the entire nation.

Having to file your case in a court that isn’t local to you, can create a lot of headaches. You may have to travel to attend court appearances—and your attorney may have to do the same, adding to the time and expense of a lawsuit. If a lawsuit is filed out of state you may be left having to hire attorneys that are licensed in that state, adding uncertainty, unfamiliarity and expense to your lawsuit. You may have to travel for depositions.

Jurisdiction

Venue clauses can also bring someone into the purview of your local courts jurisdiction. Whereas it may not legally be possible to sue someone in a court that is near to you, because they live out of state, a choice of venue provision is an agreement that a court local to you, can hear your case.

Choice of Law Provisions

Choice of law provisions don’t care where your case is filed—but wherever the case is filed, the law of the state that you designate will apply.

Why would you want to designate the law of a different state? It’s because other states may have laws that make it easier, or more favorable for your type of business in court. For example, other states may have higher maximum interest rate provisions, or longer time periods to file lawsuits, or rules that make it harder for people to sue your business.

On the other hand, while the laws of another state may help you, choosing the laws of a state other than Florida, can also make your case more difficult—both you, your lawyers, and even local judges, may not be as familiar with the laws of your chosen state. This can add complexity and uncertainty to any kind of lawsuit that you file.

You generally cannot pick and choose the laws of multiple states-for example, saying that some foreign state laws will apply, and other Florida state laws will apply.

Choice of venue and choice of law clauses in contracts are usually enforceable, so long as they are clearly written and unambiguous.

Let us help negotiate and write your business agreements in a way that works best for you and your business. Call the West Palm Beach business litigation lawyers at Pike & Lustig today for help.

Sources:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0685/0685.html

floridabar.org/the-florida-bar-journal/venue-selection-clauses-a-trap-for-the-unwary/