Social media platforms often require users to agree to Terms of Service or Terms of Use (“TOS”) to use the platform. These contracts can be lengthy and many social media users may not read them in their entirety before agreeing and proceeding to use the platform. This can raise particular issues in contract law, especially about the legal enforceability of the provisions.
The legal enforceability of TOS provisions is relevant to both social media users and app developers. Individuals or businesses who use social media should consider how the TOS affect their legal rights and obligations, especially regarding privacy and dispute resolution. On the other hand, if you’re developing an app for your business, you need to consider what provisions you should include in your TOS and how they should be drafted to ensure legal enforceability.
In particular, “choice of forum” provisions in TOS may be contentious in Canadian courts. Such provisions purport to set out where dispute resolution must take place.
The Supreme Court of Canada recently granted leave to appeal from Douez v Facebook, Inc, a British Columbia Court of Appeal decision regarding the choice of forum provision in Facebook’s Terms of Use. The provision in question purported to require all disputes to be brought in Santa Clara County, California.
Background: Douez v Facebook, Inc
The plaintiff, a resident of British Columbia, made an application to the British Columbia Supreme Court for certification of an action as a class proceeding. She alleged that Facebook’s “Sponsored Stories” used the names and likenesses of users without consent for advertising in breach of s. 3(2) of the British Columbia Privacy Act (“the Act”). Facebook responded by alleging that it obtained consent through their Terms of Use, and further made an application to request the British Columbia Supreme Court decline to exercise its jurisdiction because of the choice of forum provision in the Terms of Use.
At the British Columbia Supreme Court, the Application Judge relied heavily on s. 4 of the Act, which confers exclusive jurisdiction to hear and determine any action under the Act on the British Columbia Supreme Court. She held that this exclusive jurisdiction meant the plaintiff would have no other forum in which to bring her claim under the Act if she stayed the application in British Columbia. In the view of the Application Judge, this constituted “strong cause” militating in favour of overriding the choice of forum provision in the Terms of Use and exercising the jurisdiction of the B.C. courts over the action.
On appeal, the British Columbia Court of Appeal reversed the decision and held that the plaintiff failed to show “strong cause” to decline to enforce the choice of forum provision. Notably, in the view of the Court of Appeal, the Application Judge erred by failing to give effect to the principle of territoriality. The principle of territoriality means that B.C. law applies only in B.C., and outside B.C. only to the extent chosen by other jurisdictions. Accordingly, the Court of Appeal held it was up to California courts to determine for themselves whether they had territorial competence over actions brought under the Act, under the laws of California. The Court of Appeal held the choice of forum provision should be enforced and entered a stay of the action.
The Supreme Court of Canada appeal hearing is tentatively scheduled for November 2016.
