Venue Selection Clauses in Construction Contracts

The Enforcement of Venue Selection Clauses in Construction Contracts

Parties to a construction contract may agree where any disputes are to be litigated.  However, there are certain situations where a court may not enforce this type of provision.  In the recent case of Love’s Window & Door Installation, Inc. v. Acousti Engineering Company, Florida’s Fifth District Court of Appeal illustrated one such scenario where it would not enforce the venue selection clause. 2014 WL 4471631 (Fla. 5th DCA Sept. 12, 2014).

This case involved a multi-party litigation that began in Osceola County regarding construction of the Artisan Club Condominium.  At the end of the project, the Association filed a construction defect action against the general contractor.  The general contractor sued Dunn Corporation for improper installation of the aluminum windows.  Dunn then sued Love’s – it’s subcontractor that performed the installation.  Love’s, based on a provision in its contract with Dunn, moved to sever Dunn’s claims from the multi-party litigation and transfer venue to Volusia County.  The contract between Love’s and Dunn called for all litigation to take place in Volusia County.

The trial court refused to transfer the case and the Fifth District affirmed.  The court held that there are compelling reasons not to enforce a forum selection clause – which include multiple lawsuits, minimizing judicial labor, reducing the expenses to the parties, nad avoiding inconsistent results.  The court required the Dunn/ Love’s dispute to stay with the multi-party litigation.

Therefore, parties to a construction contract must be aware that even though the contract specifies the venue for any disputes, it is possible that a court will not enforce that provision if there is a compelling reason.