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Forum Selection Clauses in Online Terms and Conditions: Are they Enforceable?

A forum selection clause is a covenant that requires litigation of all disputes in a particular forum. Typically, the language is mandatory. Mandatory forum selection clauses are valid and enforceable.

However, a defendant must object to a lawsuit filed in an improper forum, or it waives any objection to the forum selected by the Plaintiff. Fla.R.Civ.P. 1.410(b) requires the defendant to plead specifically, and with particularity, the defense of improper venue, the failure to do so will result in waiver. Thus, it is essential to consult with an attorney immediately upon being sued in the improper forum to avoid waiver of your right to object to the Plaintiff’s selected venue. Upon a properly asserted objection, trial courts will dismiss the complaint based on improper venue under a mandatory venue selection clause.

What about if the mandatory venue clause is contained in the terms and conditions in an online transaction?

According to the Florida Third District Court of Appeal, the same rules apply.

In Hendel v. Internet Escrow Services, Inc., Plaintiff owned and operated an art gallery. He entered into an online transaction to purchase a piece of art. The transaction took place on a website owned and operated by a third party. The third party sent Plaintiff three separate emails indicating that Plaintiff had to sign into his account, click on the transaction number and "agree to the terms of the escrow instructions." The emails also contained a button to select titled "review and agree to terms." Plaintiff clicked on the button, which took him to the "agree page," where he could review the terms.

One of the terms was a forum selection clause requiring all disputes to be litigated exclusively in Orange County, California. Plaintiff argued that he should not be bound by the mandatory venue selection clause because he had no notice of the terms, including the mandatory venue selection. The trial court disagreed.

On appeal, the Third District Court of Appeal affirmed the trial court and held that Plaintiff selected the box acknowledging that he read the terms. The terms were prominently displayed on the page and conspicuous enough to put a reasonably prudent person on notice of their existence.

Rosenthal Law Group has successfully challenged improper venue and defended against improper venue arguments. Rosenthal Law Group is here to assist you in all aspects of civil litigation, including all procedural, jurisdictional, and venue challenges.