One of the provisions in contracts that is taken for granted is the provision on venue, which basically refers to where a suit arising from the contract may be filed. As a general rule, a personal action may be filed, upon the option of the one who filed the case (the plaintiff), in the place where the plaintiff or the defendant resides. Nevertheless, the parties may agree on a particular venue where all cases in relation to the contract may be filed. A sample venue provision in a contract looks like this: 

Venue. In case of suit arising from this agreement, for enforcement and/or damages for breach or violation hereof, the parties agree that the venue shall be in the proper courts of Makati City only, to the exclusion of all other courts in any other venues.

This sample provision means that the venue, which is Makati City, is clearly exclusive. A venue provision that is not clearly worded is just like none having been written at all, as the general rule, noted above, would apply. A venue provision that is defective does not provide for exclusivity, like this one:

Venue. In case of suit arising from this agreement, for enforcement and/or damages for breach or violation hereof, the parties agree that the venue shall be in the proper courts of Makati City.

Why did I say that this provision is usually overlooked? Well, it's more like not being noticed. Take for example your cellphone subscriber agreement. You'll notice that there's a venue provision written, just like the other provisions, in fine print. The venue is usually Makati City, to the exclusion of all other venues. Now, if you're from Cebu City and you figure it's only logical to file the case in Cebu City, think again. There's a high probability that the case filed in Cebu City will be dismissed for having been filed in the wrong venue. I've had the chance to defend this kind of provision, and the Supreme Court sustained our stand that the venue provision is binding.

There's really no problem if the parties to the contract mutually agree to the venue. The problem is with respect to what is known as a contract of adhesion, in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. The example given above, the telephone subscription, is one such contract of adhesion.

Whether or not a particular provision in a contract of adhesion, like the provision on venue, is binding depends on the particular circumstances. Still, a contract of adhesion is not necessarily void and unenforceable. A contract of adhesion is as binding as ordinary contracts. 

 

So, you see, it's not as simple as it looks.