There are many strategies that business owners and employers can use to reduce risks if they face a complaint or lawsuit. One of those strategies is a venue provision. This allows businesses to specify in an employment or business contract where a dispute can be heard.

So, here is a closer look at venue provisions.

How does a venue provision work?

Venue provisions can take many forms since business owners can craft the provision to meet their needs. However, generally, a venue provision can determine:

  • Where the claim is heard: Venue provisions can identify a specific county, state or federal court to hear a claim and settle a dispute. Some venue provisions specify a certain county, which can be the same area where the main business property is located or a place the business deems to be a neutral area.
  • The type of claim heard: Venue provisions also govern the kinds of claims that can be heard in a given venue. A contract may specify a venue for all disputes. In other cases, businesses may specify that only pay disputes or breaches of contracts can be taken to a particular court.

Venue provisions are not always executable

A venue provision is not always enforceable. The rules of a California court take precedence over what a contract says and may not allow a claim to be heard in a particular state court specified by the contract.

And while federal courts may take contract provisions into account, they are but one factor in deciding the right venue for litigation. A federal court might decide a contract venue provision is not valid.

This article is written only to provide educational benefits to the reader. Do not interpret it as actionable legal advice for your situation.