Great Lawsuits in Net History–Venue Clause Critical to New York Business and Others that are Online
Now that a decade has been bitten out of the 21st century, no one will straight faced argue that online business is a passing fancy. Yet, many online operations operate nakedly without a proper terms of service agreement. And even more fail to properly specify the “venue” for any legal dispute, through a “venue selection clause.”
A little primer on contract clause terminology: 1) forum selection clauses set the actual dispute forum (e.g., federal district court, or arbitration, or state court); 2) venue selection clauses set the actual geography (e.g., California versus, New York). While forum and venue selection are often used interchangeably, venue is a critical and separate component that should be addressed in online agreements, particular a terms of service agreement.
And the power of a venue selection clause is illustrated by net luminary eBay as early (in net time at least) as 2006 through the Nazaruk v. eBay, 2006 WL 2666429 (D. Utah Sept. 14, 2006) matter. In that lawsuit, eBay relied squarely on a venue selection clause to “decapitate” a plaintiff’s civil rights claims under USC 1983 and 1985. The click-warp terms of service agreement in place, then and now, calls for California as the exclusive venue for any legal dispute. Plaintiff, having filed her claim in Utah, obviously did not heed that clause. And as a result, the Utah court dismissed the case, forcing the Plaintiff to have to decide over the logistical challenge of filing a lawsuit in California as a non-resident.
Hence the power of these clauses cannot be overlooked.
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