Jerez v. JD Closeouts, LLC, 2012 NY Slip Op 22070 - 36 Misc. 3d 161, 943 N.Y.S.2d 392 (Dist. Ct.)

Rule:

"Submerged" forum selection clauses on the website of an internet merchant will not be enforced under basic contract law principles.

Facts:

Plaintiff Guillermo Jerez, a Nassau County resident, brough suit in Nassau County District Court against two Florida corporations, JD Closeouts, LLC and JD Closeouts.com, Inc., seeking a refund of monies paid ($7,146) for the purchase and shipping of certain "closeout" merchandise (thousands of pairs of tube socks). Through e-mails and advertisements on their Web site, http://jdcloseouts.com, defendants were selling such "closeout" merchandise all across the United States. Defendants filed a motion to dismiss, contending that the present lawsuit should have been brought in Florida, not New York because under their Terms of Sale, any litigation arising from an irresolvable situation shall take place in Florida. Plaintiff opposed the motion, arguing that the forum selection provision found on defendants’ Web site was not part of the contract between the parties. 

Issue:

Should the forum selection provision found on the defendants’ web site control the venue of the complaint, thereby warranting the grant of defendants’ motion to dismiss? 

Answer:

No.

Conclusion:

The court denied the defendants’ motion to dismiss, holding that the forum selection clause contained in defendants' terms of sale was buried too deeply on their Web site, and not reasonably communicated to plaintiff, to have become a binding part of the parties' contract. While presumptively enforceable, a forum selection clause must be reasonably communicated to the buyer to be incorporated into the parties' contract. Especially when an e-commerce transaction was initiated by e-mail, a seller must make an affirmative effort to reasonably communicate the essential terms of sale to the buyer, for example, through an exchange of e-mails, a click-through agreement, or some other incorporation by reference. Here, the forum selection clause, which plaintiff alleged he never saw because he was never directed to it, was among defendants' other terms of sale, which could only be found by clicking on an inconspicuous link on defendants' "About Us" page.