Stipulation on Venue & Effect

The parties may stipulate on the venue as long as the agreement is:

(a) in writing;
(b) made before the filing of the action, and;
(c) exclusive (qualifying or restrictive) as to the venue (Sec. 4[b], Rule 4).

The settled rule on stipulations regarding venue is that, while such are considered valid and enforceable, venue stipulations in a contract do not, as a rule, override the general rule set forth in Rule 4 in the absence of qualifying or restrictive words. They should be considered merely as an agreement or additional forum, not as limiting venue to the specified place. They are not exclusive but rather permissive. If the intention of the parties were to restrict venue, there must be accompanying language clearly and categorically expressing their purpose and design that actions between them be litigated only at the place named by them.
In interpreting stipulations as to venue, there is a need to inquire as to whether the agreement is restrictive or not. If the stipulation is restrictive, the suit may be filed only in the place agreed upon by the parties. It must be reiterated and made clear that under Rule 4, the general rules on venue of actions shall not apply where the parties, before the filing of the action, have validly agreed in writing on an exclusive venue.

The mere stipulation on the venue of an action, however, is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place (Spouses Lantin vs. Lantin). This exclusivity must be couched in words of exclusivity.