There are two important elements in contracts that are sometimes overlooked and often confused. They are Venue and Jurisdiction.

Jurisdiction is the authority, capacity, power or right to act. It is the authority by which courts and judicial officers take cognizance of and decide cases. When a court is said to have proper jurisdiction, it is the proper body to review issues related to the contract. A derivative of this concept includes “jurisdictional amount”—the limit of an amount in controversy that may be heard within the jurisdiction of a particular court. For example, small claims courts, district courts and circuit courts generally have distinct jurisdictional amounts.

Venue, on the other hand, is the place in which an injury complained of, is declared to have been done. It relates only to the place where or territory within which a party to a contract may require the dispute or case to be tried.

Venue does not refer to jurisdiction at all. Jurisdiction of a court or arbitrator means the inherent power to decide a case; whereas Venue designates the particular location (county or city) in which a court or arbitrator with jurisdiction may hear and determine the case or controversy.

Since Venue is related to the convenience of the parties, it may generally be waived by consent. Jurisdiction, however, may not.

Contracts sometimes provide for a Venue provision that is most convenient to the creditor, with an acknowledgment and waiver by the consumer.

Such a waiver can be problematic in a consumer setting, since courts are more apt to protect consumers against contract terms that may be unfair, deceptive or abusive—such as a Venue waiver.

Practice Pointer: Review your contract terms. If your contract contains a Venue waiver, consider whether such waiver is unfair to the consumer. And, consider whether a severability clause may be called for in connection with a Venue waiver.

Please Note: This is the two hundred-seventh blog in a series of Back to Basics blogs, in which relevant and resourceful information can be easily accessed by clicking Dentons - Consumer Finance Report.