Part 2 – Louisiana Venue Analysis: Contracting for Venue
Written by Kristin Lausten
One of the nice things about well-planned and well-crafted contracts is that they can include clauses that cover a number of different contingencies that could happen involving the contract. For instance, many contracts contain dedicated clauses about how breaches of the contract, liquidated damages, and disputes arising from the contract will be handled. Specifically concerning when contract disputes are litigated, many contracts contain clauses directed toward forum selection, i.e., the appropriate venue in which any lawsuit about the contract will be heard.
Forum-Selection Clauses In Contracts
It is not uncommon for contracts, especially business or construction contracts, to contain a clause directed to venue selection in Louisiana. In fact, the Louisiana Supreme Court has held that forum selection clauses are enforceable unless enforcement would be unreasonable, unjust, over reaching, or the subject of fraud, in the 2014 decision in Shelter Mutual Property Insurance Co. v. Rimkus Consulting Group, Inc. Only in limited situations as provided by state law are forum selection clauses unenforceable.
- In a small subset of construction contracts, out of state forum selection clauses are unenforceable under R.S. 9:2779(A).
- Forum selection clauses transaction and interaction contracts between out of state professional telephone solicitors and Louisiana residents are unenforceable under R.S. 51:1407(A) of the Louisiana Unfair Trade Practice Act.
- Choice of forum clauses are prohibited under R.S. 23:921(A)(2) for employment contracts unless the clause is expressly, knowingly and voluntarily agreed to and ratified by the employee.
Oftentimes the contracting parties agree to a particular venue in the contract, meaning that any dispute that arises concerning the terms of the contract must be brought in the venue or parish specifically identified in the choice of forum clause of the contract.
Forum selection clauses can be as general or as specific as the contracting parties prefer. Venue can be contractually specified to a particular:
- Type of tribunal
- Specific parish or Federal District Court
- State
- Country
Forum Selection Clauses Prevent Forum Shopping
Many contracting parties prefer to have a forum selection clause in the contract that dictates the appropriate venue because it takes a lot of the guess work out of where the lawsuit can be brought. Forum selection clauses also prevent the parties from forum shopping, a practice of evaluating a number of viable venue options to determine which venue would yield the best likelihood of success based on whether the venue is plaintiff or defendant oriented.
- A few examples of plaintiff oriented venues in Louisiana include: Plaquemines parish, East and West Baton Rouge parish, Orleans parish and Calcasieu parish.
- A few examples of defendant oriented venues in Louisiana include: St. Tammany parish, Vernon parish and Jefferson parish.
- Examples of neutral venues include: Lafayette parish, Union parish, Caddo parish and Beauregard parish.
When a forum selection clause leaves wiggle room for a plaintiff to choose a venue, (e.g., when the forum selection clause is only limited to the state of Louisiana), it is in the party’s best interest to consult with an experienced contracts dispute lawyer about what venue would be the best to bring the lawsuit and/or whether an objection to venue would be appropriate.
The author may be contacted at:
Kristin M. Lausten
New Orleans, Louisiana
Telephone: 504.377.6585
E-mail: kristin@kristinlausten.com
Web: www.kristinlausten.com
This article is provided as an educational service for general informational purposes only. The material does not constitute legal advice or rendering of professional services.