Any business that has been forced to file or defend a lawsuit knows that the location of the lawsuit has a profound impact on the case. Having to litigate in a state or county other than where your business is located causes many concerns. A company may have to engage counsel with which it is unfamiliar. The cost of litigating in another state or county is far greater than the cost of litigating in your own "backyard." Even if a company wins the lawsuit, collecting an out-of-state judgment may prove difficult.

In the litigation context, the location of the lawsuit depends upon the proper jurisdiction and venue. Jurisdiction is the power of a court to preside over the parties and adjudicate the dispute. Venue refers to the county in which the lawsuit may be brought.

One way to increase the chances that a lawsuit will be filed in the location where a business operates is to include a "forum selection" clause in all of a company's contracts, invoices, terms & conditions, and other agreements. Forum selection clauses are generally enforceable by the courts. A typical forum selection clause provides that the parties have agreed in advance to submit to the exclusive jurisdiction of the courts in a ceratin state (or country). For example, a company with its principal place of business in California may insist upon a forum selection clause designating exclusive jurisdiction over any dispute to the Superior Courts of California.

Unlike forum selection clauses, venue selection clauses are generally unenforceable in California. In California, proper venue - that is, the county in which the lawsuit may be maintained - is governed by statute. For many business disputes, proper venue is where the contract is entered into or where it is to be performed, in addition to the location of the defendant. So although venue selection clauses are generally unenforceable, businesses are wise to include express provisions which demonstrate the contract was entered into and is to be performed in the county in which the business operates.

Whether a lawsuit is litigated in the county in which your company resides has a large impact on the cost and value of a case. The attorneys at Navigato & Battin LLP can assist you company implement steps which increase the likelihood of a lawsuit being filed locally.