Quebec Court of Appeal declares your Terms of Use useless

It's a nice building

The Court of Appeal of Québec and its multiple phallic columns

It has been a very busy couple of weeks for internet law in Canada. Last week, the Supreme Court of Canada declared Alberta’s privacy law unconstitutional and essentially junked the whole thing. This week, the Conservative government introduced Bill C-13, the so-called “Cyberbullying legislation”, which some are already calling a bullshit excuse for more of the lawful access crap we had with Bill C-30. That’s some important stuff I’ll write about eventually, I swear. But I want to go back to the heady days of two weeks ago, when the Quebec Court of Appeal made a ruling against eBay that essentially makes my job drafting Terms of Use a complete waste of time. That’ll teach me to charge people hundreds of dollars an hour for it.

So the case is Ebay Canada Ltd. v. Mofo Moko, and while of course I am being hyperbolic (who? me?) about the death knell of Terms of Use, it is a pretty important decision for Quebec internet lawyers like me. It’s just a nice fuck you to lawyers who draft Terms.

So Kevin Mofo Moko and his brother Sandrin Mofo Moko (I will resist commenting on the “Mofo” part) bought a pair of shoes. Not just any shoes, Nike Foamposite One Galaxys. They bought them for $316. Apparently they are rare, so they put them on eBay. Bidding got up to $96,750 when eBay pulled the plug on the auction, as is their right when something seems to be amiss with an auction. We’re not sure what was amiss, but the fact a pair of fucking running shoes was getting $97k bids we guess has something to do with it.

Anyway, the brothers decided to sue eBay for the $97k they would have had. Being Montrealers, they sued in Montreal. Really, who needs to travel? But eBay’s lawyers said, whoa, dude, hold on. Our Terms of Use include an “exclusive jurisdiction clause” which says go fuck yourself, Quebec Courts. Well, I’m paraphrasing. It really says this:

You agree that any claim or dispute you may have against eBay must be resolved by a court located in Santa Clara County, California,… You agree to submit to the personal jurisdiction of the courts located within Santa Clara County, California for the purpose of litigating all such claims or disputes.

Seems pretty clear to me. I have these in all the Terms of Use I draft. In fact, they exist in just about every contract in the fucking world. Parties agree to a jurisdiction in case of a dispute and that’s it. And the Terms of Use is just a contract between a user and website operator. Well, the Quebec Court of Appeal says not so fast, bub. Your dinky Terms of Use don’t apply here! Distinct Society indeed.

Why don’t they apply? Well, they apply (sorry for the hyperbole again) but the exclusive jurisdiction clause is useless. Why? Let’s go to the law:

Article 3149 Civil Code of Québec: A Québec authority also has jurisdiction to hear an action involving a consumer contract…

So the Court decided that a Terms of Use is a consumer contract! Normally, I guess I’d agree with that. You sign up for Facebook, you’re a consumer. But selling products on eBay makes you a consumer? Rly? Why? Let’s go to the law again:

Quebec Consumer Protection Act 1.(e)  “consumer” means a natural person, except a merchant who obtains goods or services for the purposes of his business;

The Court said that you’re either a consumer or a merchant running a business. In the Court’s defense, they do seem kind of upset about this dichotomy. They wonder if maybe there shouldn’t be a category of in-between which would apply here. They say:

On the one hand, the consumer-merchant dichotomy excludes a third class between the two. On the other hand, given that it requires full-time transactions to be a merchant, obliges us to conclude, as the jurisprudence has done, that they must be consumers in light of only one isolated speculative transaction, which, if it was repeated, night have changed the status. (my crappy translation from the original French)

Well ok then. At least you recognize this may be a load of crap. But the exclusive jurisdiction clause is toast, and the $97k running shoe lawsuit can proceed here in Quebec.

Super happy fun-time analysis time!

Well, I really have only one thing to say for the analysis. If a seller on eBay is just a consumer, then virtually all website users will be consumers. Then virtually all website Terms of Use will be consumer contracts. Then virtually all exclusive jurisdictions clauses will now be useless with respect to Quebec website users. So here’s your lesson: do your web surfing here in Quebec, you’ll be able to sue to your heart’s content.

And to take it to the next step, if all Terms of Use are consumer contracts, this opens a whole can of worms you can’t even imagine. Quebec is called the most consumer-friendly jurisdiction in North America for a reason. A bunch of other stuff in these Terms may not be valid either. No point in hiring me anymore. I’ll have to go back to selling crack to Mayor Ford to make my living.

Posted in: Internet law basics, The Courts
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2 Responses to Quebec Court of Appeal declares your Terms of Use useless

  1. Hadulf says:

    …then virtually all

    OMG. You are a lawyer!

    Man, keep us posted on this lawsuit!

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