The Supreme Court of Canada recently released its much anticipated Uber Technologies v. Heller decision, a landmark ruling with significant implications for the validity of online contracts and for employment relations in the gig economy. The court rejected an arbitration clause in an Uber contract with its drivers, finding the clause unconscionable.
The decision unsurprisingly quickly caught the attention of many in the legal, technology, business, and consumer advocacy communities. Professor Marina Pavlovic is a friend and colleague at the University of Ottawa, who appeared before the Supreme Court representing the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic as an intervener in the case. She joined me on the podcast to discuss the decision and to explain why she believes it is an earth shattering ruling for online contracts in Canada.
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The Supreme Court of Canada issued a landmark decision this morning on the enforceability of forum selection clauses in online contracts, rejecting Facebook’s effort to block a privacy class action lawsuit in British Columbia on the grounds that its own contract specified that legal actions be brought in California. A divided court ruled that the unequal bargaining power between consumers and companies such as Facebook – combined with the importance of privacy rights – meant that the clause should not be enforced and that the lawsuit should proceed in Canada.
The decision represents a clear recognition that courts should not be quick to allow companies to contract out of important rights by ousting local laws through forum selection clauses. More broadly, the terms found within non-negotiated take-it-or-leave it clickwrap contracts should not always be enforced by the courts, particularly where important rights or remedies might be lost by doing so. While forum selection clauses are an obvious mechanism for restricting rights, the reasoning might also be applied to other online contractual terms that seek to override important laws and protections. These could include contractual terms that seek to override copyright user rights such as fair dealing or local consumer safeguards.
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Few things are more common on the Internet than the lengthy, largely incomprehensible, online contracts that are often buried at the bottom of web pages with a simple link to “terms”. These agreements sometimes run dozens of pages if printed out and invariably transfer all responsibility and liability to the user, while selecting a jurisdiction clause that is advantageous to the website and inconvenient to most users.
Consumers agree to these contracts dozens of times each day (sometimes proactively by clicking that they agree and most other times by impliedly agreeing to the terms by using the website), but the enforceability of all the terms within the agreement remains an open question.
The law has removed most uncertainty about whether an electronic contract can be enforceable – it can – but ensuring that the form of the contract is valid does not mean that all of its provisions will be enforced by a court. My weekly technology law column (Toronto Star version, homepage version) notes that last month, a Quebec court provided an important reminder that some provisions may not be enforced, as it rejected eBay’s standard terms which require all disputes to be adjudicated in California.
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Appeared in the Toronto Star on March 30, 2013 as Quebec Court Says No To eBay’s Online Contract Few things are more common on the Internet than the lengthy, largely incomprehensible, online contracts that are often buried at the bottom of web pages with a simple link to “terms”. These […]
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