Contract Terms – Venue
I plan to do a series of blog posts of key clauses that everyone should pay attention to when signing a contract. Venue is the first clause usually included in a paragraph titled “Legal” or even “Venue,” and it discusses where lawsuits can be brought if a contract breach occurs. If both parties are in Massachusetts, this might be skipped because that is a convenient forum for both parties.
But what if one party is not from Massachusetts? Where is the suit filed? The normal procedure is that you file in the defendant’s forum. Therefore, the defendant cannot complain it was inconvenient for them to defend a suit.
However, if the parties agree to a specific venue in the contract, that is where lawsuits must be brought. As you can imagine, the person who drafts the contract chooses the forum. You can get into trouble if you contract with a California company, quickly read the contract, don’t realize the forum for lawsuits is California, and then try to sue in Massachusetts.
And if you think dealing with an entity in another country is different, think again. In Cossouto-Noff (SJC-13026), Plaintiff obtained a judgment in Israel against the defendant from Massachusetts. The plaintiff then sued in MA to enforce the judgment. The defendant argued the judgment shouldn’t be enforced because there is no way she could have defended a suit in Israel. However, the SJC stated that the judgment from Israel was valid because the parties contracted for that language.
The venue clause is usually at the end and only a sentence, but that small bit of language can lead to big problems if the other side breaches and you have to sue in an inconvenient forum. As always, if you ever have a question about contract language, including venue provisions, you can always contact me, and I’m happy to discuss.