Virginia Code 6.2-2234: Place for bringing action under a contract or agreement to provide sales-based financing; certain fees paid by provider; confessions of judgment prohibited
A. Where a provider enters into a contract or agreement with a recipient to provide sales-based financing, any cause of action arising under such contract or agreement shall be brought in a court in the Commonwealth. Any provision in the contract or agreement mandating that such action be brought outside the Commonwealth shall be unenforceable.
Terms Used In Virginia Code 6.2-2234
- broker: means a person that, for compensation or the expectation of compensation, obtains or offers to obtain sales-based financing from a provider for a recipient. See Virginia Code 6.2-2228
- Contract: A legal written agreement that becomes binding when signed.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- provider: means a person that extends a specific offer of sales-based financing to a recipient. See Virginia Code 6.2-2228
- Recipient: means a person whose principal place of business is in the Commonwealth and that applies for sales-based financing and is made a specific offer of sales-based financing by a provider. See Virginia Code 6.2-2228
- Sales-based financing: means a transaction that is repaid by the recipient to the provider, over time, as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient. See Virginia Code 6.2-2228
- United States: includes the 50 states, the District of Columbia the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands and the United States Virgin Islands. See Virginia Code 1-255
B. Where a contract between a provider or broker and recipient contains an arbitration provision, such contract shall not require face-to-face arbitration proceedings outside the jurisdiction where the recipient’s principal place of business is located. If the contract requires face-to-face arbitration proceedings outside such jurisdiction, such provision is unenforceable. The enforceability of the remaining provisions of the arbitration agreement and the method of selecting a forum for the conduct of the arbitration proceedings are as provided in this Code, the United States Arbitration Act (P.L. 68-401), and any applicable rules of arbitration. The provider shall pay any arbitrators’ expenses or fees or any other expenses or administrative fees incurred in the conduct of the arbitration proceedings.
C. No sales-based financing contract shall contain any confession by judgment provision or any similar provision. Any such provision in the contract shall be unenforceable.
2022, c. 516.