Part 3 – Louisiana Venue Analysis: Venue in Construction Disputes
Construction contracts contain a lot of pertinent terms and details about the construction project. In addition to identifying the parties to the contract, construction contracts further address matters concerning time frames for completion of the project or stages of the project, circumstances involving suspension or termination of the project, payment, indemnification, liability issues, and liquidated damages for breach of the contract. These are all key terms to the agreement that govern how the parties will handle certain matters. Clear and well-drafted construction contracts further include provisions directed to a choice of venue and forum. A forum selection clause, or venue provision, is a clause in a construction contract that governs what venue will be appropriate in the event that a dispute arises concerning the terms of the contract. These clauses allow the contracting parties to predetermine jurisdiction over any disputes that arise from the contract.
Making a predetermination in a construction contract as to venue can have significant strategic advantages for parties to the contract. Some parishes in Louisiana are plaintiff oriented venues, i.e., unfavorable to defendants, where as other parishes are defense oriented venues, i.e., unfavorable to plaintiffs, so careful consideration should be given when choosing a venue for a venue selection clause. Not only should Louisiana construction contracts designate a state venue, but the construction contract should also stipulate a federal venue in the event that a dispute arising from the contract warrants federal jurisdiction.
Venue Provisions: Often Last, But Certainly Not Least
While venue selection clauses are often one of the last few clauses included in a construction contract, they are critically important. The venue selection clause lets the contracting parties know their obligation under the contract to bring any disputes in a particular venue. It is not uncommon for the owner of the construction project to designate the venue as where the owner has his or her principal place of business, or where the project is being constructed. The venue provision can even go as far as to designate a particular court in a specific parish or federal district.
Enforceability of Venue Selection Clauses in Construction Contracts
Venue selection clauses are generally considered to be enforceable in Louisiana contracts. However, forum selection clauses in construction contracts are unique in that state law can render a venue provision unenforceable in certain circumstances. For instance, out of state choice of forum clauses in a construction contract are unenforceable under La. R.S. 9:2779(A) where the project is a public or private works project, if one of the parties is domiciled in Louisiana but the other is not, and the project site, equipment and materials are all located in Louisiana.
If you have questions or concerns or need legal advice about a dispute arising from a construction contract, you should reach out to an experienced construction law attorney as soon as possible.
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Kristin M. Lausten
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.