Legal Question in Business Law in California

Re: Venue

Mr. Hoffman's reply is fine.

However, the first place to look is in the wording of the contract

itself. Does it specify a place where suit is to be filed? Where

performance is to occur? The parties can consent to jurisdiction

and venue in a contract in a place other than that which the

rules would otherwise suggest.

Re: Venue

Mr. Somit's supplement to my answer is only partially correct. He is correct that the contract can specify where performance is to occur; if performance actually does occur in the county designated, then venue is proper in that county. I mentioned this in my earlier response, although I did not go into quite as much detail.

Mr. Somit is wrong, however, when he suggests that a contract can simply specify where a subsequent lawsuit will be brought. Under Code of Civil Procedure section 395 (d), most contractual clauses which purport to do this are unenforceable.

Thus, if your contract says "I will perform my obligations under this contract in San Diego County" -- and if you actually do the work in San Diego County -- then venue is proper in San Diego. However, a clause that simply says "If either of us sues the other over this contract, the courts of San Diego County shall have venue" is not enforceable. San Diego may be a proper venue for other reasons, but the language of the contract will not prevent the case from being brought in another county where venue is proper, nor will it permit the case to go forward in San Diego if venue is otherwise improper there.

Re: Venue

Several factors go into a determination of venue, and depends in part on the nature of the case. Thus, for example, if you are suing over rights to real property, venue is only proper where the land is located. In most cases, venue is proper where the defendant lives, but venue is often not limited to this one county. Thus, for example, a breach of contract case may be brought in the county where the defendant lives or where the contract was to be performed (if specified in writing) or where the contract was entered into. This last factor means where the offer was accepted; if your customer signed the contract you sent her and faxed it back, it was accepted at her end of the fax line and not yours. But if the contract specifies that you are to perform your obligations at your place of business, then you can sue locally.

Knowingly filing suit in the wrong venue can lead to costly sanctions as well as a transfer of the case to a court in a county that does have venue, so don't take these requirements lightly.

If the other side doesn't object to the venue of the court you choose (and your client doesn't seem likely to miss such an issue), then the court can render a valid judgment. In some cases there are valid reasons why the parties might disagree about the proper venue, and sanctions will not be available where the plaintiff reasonably but incorrectly believed he filed in a court that had venue.