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Venue and Choice of Law

Posted on June 28, 2017 | Posted in Civil Litigation, Five Liners

Douez v. Facebook, Inc. 2017 SCC

Plaintiff wanted to commence a class-action for breach of privacy. Facebook’s contract noted that all disputes had to be resolved in California according to California law. The court noted that there is a 2-step process to determine whether to enforce a forum selection clause. First, the party seeking to enforce the forum selection clause (the “Enforcing Party”) has to establish that the clause is clear and enforceable and applies to the cause of action. At this step, the court references contract law principles to determine the validity of the clause and, as with any contract claim, the party resisting enforceability (the “Resisting Party”) may raise defences such as unconscionability, undue influence, and fraud. Second, if the Enforcing Party passes the first test, the Resisting Party must show strong reasons why the court should not enforce the clause and stay the action. To do so, the court has to consider all circumstances, including the convenience of the parties, fairness, the interests of justice and public policy. In this consumer context case, unlike a commercial matter, there was a gross inequality in bargaining power. Further, the rights being litigated were quasi-constitutional privacy rights. The Court did not enforce the clause.

 

Jonathan Speigel

 

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.

 

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