Court Validates Forum Selection Clause in Website Terms of Use

Online purchasesA recent post discussing the validity of online agreements, has been further underscored by a recent ruling of the U.S. District Court for the Northern District of California.  The Court held that the forum selection clause within a website’s terms of use provisions was valid and supported the transfer of the case to another state. 

The putative class action suit was brought by a customer against a car rental company and a travel website over a price disclosure dispute. The companies filed a motion to transfer the case to Delaware based on the forum selection clause included in the travel website’s terms of use page, which the plaintiff was required to accept in order to proceed with an online transaction.

In support of the motion to transfer, the travel website demonstrated that the transaction could not have been completed unless the customer affirmatively clicked a box to accept the terms of use. The court held that even though the terms of use were provided through a hyperlink on the site, in the absence of affirmative denial from the customer that he did not click to accept the terms of use, the customer had notice and consented to the  forum selection clause within the terms of use, and granted the defendants’ transfer motion.

The important aspect aspect to take away from this decision is the fact that the plaintiff was required to check a box confirming his agreement with the terms and conditions, and the link that directed him to the terms and conditions page.  While most if not all websites offering products, services, and premiums require their customers to acknowledge agreement with their terms and conditions, not all of those sites include a direct link to them.  Plainly, they should do so.


Author: Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.
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