Wednesday, April 4, 2007

Another reason not to do your own contracts

Where do you file the lawsuit when the business relationship goes so bad that a lawsuit is the only solution? In your county? In the county where the defendant lives? What if the defendant lives out of state?

Indiana's Trial Rules use the term venue for the place for filing a lawsuit. Constitutional law and the Trial Rules define where to file a lawsuit against an out-of-state defendant.

However, the contract itself can say where any legal action can take place. If you are in business, think about the cost to you of traveling to appear in court. The contact should apportion that cost so that it does not become too much of a burden in protecting your business interests.

We call these provisions choice of law provisions. I had a call this morning from an Indianapolis business which had contracts with a Columbus, Ohio business and the Indiana firm was not getting its payments. No choice of law provision in its contracts. Why not? They wrote the contracts themselves. Now they must get an Ohio lawyer and they must go to Ohio to try the case. They do have a provision for attorney fees and court costs, but that does not cover their costs for going to Columbus, Ohio.

If you do business anywhere outside of your own county, your contracts need a choice of law provision. Check them and see if they have such a provision. If not, give me (or your attorney) a call to fix the problem