Airplane wing signifying traveling to a different state due to a venue clauseEver casually glossed over the 'irrelevant' tail end of a bulky contract without a second thought? Well, you might've unwittingly agreed to a surprise trip to a faraway courthouse!

In the complex world of contractual agreements, Pandora's Box often takes the form of a seemingly innocuous venue clause. It's usually nestled comfortably amongst other 'Why should I care about this?' provisions like 'Severability' and 'Amendments'. On the surface, it appears harmless, but it has the potential to become the star of a contractual dispute.  

Just the other day, I was consulting with a potential client who found himself in a tricky situation with one of these so-called 'boring' clauses. Rather than concerning himself with the technicalities of the contract, he had glossed over the venue clauses. Unbeknownst to him, he'd agreed to a lawsuit location far from his safe and familiar business landscape. And to make matters worse? The company suing him also sued him in his local courts as well and so now he finds himself defending against two lawsuits over the same contract in two different states!

What is a Venue Clause?

So, what exactly is a venue clause? In legal jargon, it's the provision in your contract that defines where any lawsuits under your contract will have their day in court. Under certain circumstances, it may seem completely justified. For instance, if both parties or a piece of property in question are local, it's only logical to define the venue as the local court. However, there are instances where the venue clause can turn into a wild card, allowing lawsuits in State X while all relevant parties reside in States Y and Z. Without this specific clause in the contract, the court in State X wouldn't even entertain the case.

Still wondering why any of this should concern you? Imagine for a moment, winning a lawsuit in your home state, only to find out you've lost the case and are now obligated to pay the opposing party's attorney fees in a different state. Or perhaps, you're now faced with the daunting task of finding and hiring a new attorney because your trusted legal consultant doesn't hold a license to practice law in that state. Suddenly, that harmless clause doesn't seem so harmless anymore, does it?

Your takeaway? READ YOUR CONTRACTS. From the very first letter at the top to the very last period at the bottom. Resist the alluring urge to sign without combing through every last detail, especially those final few provisions. 

Don't let venue clauses spring up on you. They're far from harmless and trust me when I say ignorance is never bliss when it comes to legally binding agreements.

Do I Need a Business Attorney?

If you or your business needs help with your contract and the clauses that populate it, it's crucial that you talk to a business attorney. Let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you and your business.

Andrew Ayers
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I work with business and estate planning clients to craft legal solutions to protect their legacies.
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