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More on venue and jurisdiction

| Oct 29, 2015 | Business Litigation |

 

Venue is a more particular question of location within a jurisdiction. Say a business in Marquette is suing a Detroit-based supplier. Venue could be proper in either city, but typically should be chosen based on where the important elements of the case occurred. This determination can be complex.

 

For instance, if the majority of witnesses are located in Marquette and the contract was executed there, venue may be proper for the case to be tried in that location. While you could file the case in Detroit, the defendants could ask the court to move the venue. The complexity may arise when venue is proper in more than one location.

 

In cases involving the jurisdiction of more than one state, the use of a forum selection clause can limit the uncertainty. With such a clause, you can predetermine that all issues that arise from a transaction will be litigated in a particular jurisdiction, and Michigan has a statute that indicates a contract may specify jurisdiction.

But a Michigan court has recently ruled that for that choice to be effective, it has to be exclusive, meaning the clause must indicate that a specific jurisdiction is exclusive.

Jurisdiction and venue may be chosen for logistic reasons, but there is potentially another element. If two businesses are pitted against one another in litigation, a court in their home territory may be more sympathetic to their concerns and interests, as they may be a substantial employer and being a great deal of revenue into the city or state.

When you are drawing up agreements, these issues should be discussed with your attorneys. Like an insurance policy, you hope to never need to employ them, but you will be glad to know they are there if you must call upon them.

Source: crainsdetroit.com, “Detroit or D.C.: How important is setting for Quicken-Justice Department loan dispute?” Chad Halcom, October 21, 2015

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