§ 116.225.Certain choice of forum clauses void and unenforceable

Some consumer contracts try to require any lawsuit to be filed in a distant state, which can price an ordinary person out of a small claims-sized dispute entirely. Section 116.225 blocks that tactic for consumer transactions: an agreement entered into or renewed on or after January 1, 2003 that picks a forum outside California for a dispute arising from an offer or provision of goods, services, property, or credit for personal, family, or household purposes is declared contrary to public policy, void, and unenforceable, so long as the dispute would otherwise be within a California small claims court’s jurisdiction.

The rule targets consumer transactions specifically — goods, services, property, or credit for personal, family, or household purposes — not commercial contracts between businesses. Its practical effect is that a California consumer with a small claims-sized dispute can bring that case in a California small claims court even if a form contract tried to designate another state as the only available forum.

Because the clause is void rather than merely voidable, a defendant does not need to take any separate step to invalidate it; the small claims court can proceed on the merits without honoring an out-of-state forum clause that falls within this section’s reach.