Out of State Venue in Florida Construction Disputes
Construction disputes happen. Often, the parties to the contract agree in advance about where any dispute would be decided. This is known as a venue clause. Venue clauses can require the dispute to be in a particular city, county or may even require the dispute be located where the project is located. Venue provisions are generally valid and enforceable. However, one type of venue provision is not enforceable.
Any venue provision in a contract for improvement to real property which requires legal action involving a resident (i.e. Florida) contractor, subcontractor, sub-subcontractor, or materialman to be brought outside this state is void as a matter of public policy. To the extent that this venue provision in the contract is found to be void, any legal action arising out of that contract needs to be brought only in Florida in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located, unless, after the dispute arises, the parties stipulate to another venue.
In a 2000 case, Kerr Const., Inc. v. Peters Contracting, Inc., 767 So.2d 610, 613 (Fla. 5th DCA 2000), the Fifth District explained:
In applying the above rules of construction to section 47.025, we note that section 47.025 provides that forum selection clauses in contracts for improvements to real property are void if they require that legal action involving a resident contractor or subcontractor be instituted outside Florida. Thus, the statute merely requires that venue lie in Florida for disputes arising under these specific types of contracts. Accordingly, the statute does not affect the substantive rights of the parties. It merely requires that those substantive rights be adjudicated by a Florida court.
While this statute does not affect any choice of law provision in the contract, it does benefit a resident contractor working on a Florida construction project by requiring any dispute to be litigated in only in Florida courts. This is certainly beneficial to a Florida contractor who executes a contract for a Florida job that requires it to litigate in a jurisdiction outside of Florida. For example, a large out of state general contractor cannot force its Florida subcontractor base to travel out of state to fight contractual disputes. Home field advantage is better than being required to litigate in a foreign jurisdiction. An understanding of the specific construction contract provisions is necessary to protect your rights – venue is an important aspect of every dispute.
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