Website Terms of use: Jurisdiction clauses

November 9, 2010 · Posted in compliance, Guest Blogger, legal, rights · Comment 

Thanks to Paul Foley of IIA Member Company McKeever Rowan for the following overview of a case where a company’s website terms of use saved the day.

In providing a service over the internet into other EU countries, from a website hosted in Ireland, an internet service provider will typically want to ensure that if there is a dispute with a user of the service, that the dispute can be litigated in Ireland.

Gavel
Photo owned by walknboston (cc)

The Brussels Regulation (which determines which courts have jurisdiction in civil and commercial disputes between companies and individuals) at article 2 provides (subject to some exceptions including that set out in article 23) that a person (legal or natural) may only be sued in the member state in which he or she is domiciled.

Billigfluege.de Gmbh ( “defendant”) a German service provider was engaged in screen scraping  of Ryanair’s web site, (gathering flight data  from the Ryanair site and reproducing it on their price comparison site and selling it for a fee) a practice which Ryanair alleged was in breach of the site’s terms of use, clearly accessible through a hyperlink on the front page of Ryanair’s website.

One of the terms of use (clause 7) provided that the courts of Ireland were to have exclusive jurisdiction in any dispute involving the terms of use. This was consistent with article 23 of the Brussels Regulation, which allows as an exception to article 2 for parties to a contract to agree that a particular EU member state court would have jurisdiction in the event of a dispute.

Ryanair took proceedings for breach (under a number of headings) of their terms of use in the Irish High Court against the defendant.

The defendant argued that Ryanair’s terms of use could not form the basis of a contract because all of the traditional features of a legally binding contract were absent including that there was no consideration and accordingly Ryanair could not rely on article 23.

One of the issues that a previous decision of the European court of justice had argued, was that an EU member state court could have exclusive jurisdiction where there was a validly concluded jurisdiction clause, even where there was a dispute as to the validity of the agreement in which the clause was included.

In a decision of the Irish High Court (which is the subject of an appeal to the Irish Supreme Court, which is  imminent), the judge decided that i) the Ryanair terms of use had been fairly brought to the attention of defendant (they were clearly accessible through a link on the front page of the site ); ii) the provision of information by Ryanair through their terms of use policy, which offer of information was accepted by the defendant when accessing the site and lifting the information,  constituted valid consideration; and  iii) the defendants had used the site and made a profit on the information obtained and by doing so had clearly assented to the terms of use.  Accordingly the judge found that the exclusive jurisdiction clause in the terms of use had contractual effect and that the Irish courts had authority to determine the dispute. The judge did not go so far as to declare the remainder of the terms of use legally valid.

The judgement provides some encouragement to web site owners, that if their web site terms are sufficiently well drafted (including incorporating a home state jurisdiction clause), and are brought properly to the attention of site users, that the onerous provision of article 2 of the Brussels Regulation can be avoided and home state jurisdiction maintained.  It remains to be seen whether the Supreme Court will uphold this decision.

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