Proper Venue Selection Provision Enforceable in Contract

  A basic well-known rule of civil procedure is that you cannot confer jurisdiction by consent. Nearly 75 years ago the California Supreme Court held that the rule applied to venue as well. How does the rule apply to venue selection provisions in contract?

  California has a comprehensive statutory venue selection scheme set forth in Code of Civil Procedure §§ 392-403. Pursuant to that scheme, depending on the facts, venue may be proper in more than one county. For example, pursuant to section 395.5, where the defendant is a corporation or association, venue is proper in the “county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated . . . .”

  Generally, when venue is proper in more than one county, a plaintiff has the choice of where to file the action from among the available options. There is a presumption that the county in which the plaintiff chose to file the action is the proper county. The burden rests on the party seeking a change of venue to defeat the plaintiff’s presumptively correct choice.

  What about the circumstances where the parties’ contract specifies a specific county of jurisdiction among the available proper choices? Should this venue selection clause prevail over plaintiff’s choice of venue?

  The Court of Appeals, in Battaglia Enterprises, Inc. v. Superior Court (Yard House USA), has answered this question in the affirmative holding that “where . . . two sophisticated parties agree, pursuant to arm’s length negotiations, to litigate an action in one of multiple statutorily permissible venues, they should be held to their agreement.” Thus, it is only where the venue selection provision attempts to confer improper venue may it not be given effect.

  The specific language in Battaglia should be noted as well as the venue specific language in section 395(b) [governing consumer contracts which generally provides for venue only in the defendant’s county of residence] and 395(c) which provides that any provision of an obligation described in subdivision (b) waiving that subdivision is void and unenforceable.

  I consult with clients and accept cases involving contractual venue selection provisions. For other types of cases I accept, please consult the My Practice page. If you are seeking a legal consult or representation, please give me a call at 818.971.9409. – Michael Daymude

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