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Permissive vs. Restrictive Venue Stipulations: Why Contract Wording Matters in Philippine Courts

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TLDR: Philippine courts interpret venue stipulations strictly. Unless a contract clearly and unequivocally restricts venue to a specific court, it will be considered merely permissive, allowing cases to be filed in other courts as per the Rules of Court. Vague or non-exclusive language can lead to unexpected litigation locations and increased costs.

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G.R. NO. 173979, February 12, 2007

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INTRODUCTION

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Imagine you’re a business owner in Makati and you enter into a contract with a supplier based in Cebu. The contract includes a clause stating that any legal disputes will be filed in