A clickwrap agreement appears on an internet webpage and requires that a user consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with the internet transaction. Even though they are electronic, clickwrap agreements are considered to be writings because they are printable and storable.
Defendant, Google, Inc. sought to have plaintiff’s amended complaint dismissed and/or transferred on the ground of improper venue. Defendant contended that plaintiff agreed to Santa Clara County, California as the proper venue for all actions between them by clicking on an internet “clickwrap” agreement which contained a forum selection clause. Plaintiff, on the other hand argued that there was no meeting of the minds and that the “clickwrap” agreement is a contract of adhesion which by its terms is unconscionable.
Is the forum selection clause in an internet clickwrap agreement enforceable and, if so, whether transfer of the case was warranted?
Yes to both.
The court applied federal law to determine the validity of the forum selection clause based on case law that requires federal law to be applied in diversity actions. The clickwrap agreement was enforceable as there was reasonable notice of and mutual assent to the agreement and the agreement described with sufficient definiteness a practicable process by which price was determined. The agreement was not procedurally unconscionable where the advertiser was a sophisticated purchaser, he was not pressured to agree, he was capable of understanding the agreement's terms, and he consented to the terms. The agreement was not substantively unconscionable as the forum selection clause did not shock the conscience, and the 60-day limitations period afforded sufficient time to identify, investigate, and report billing errors. The request to transfer venue was granted pursuant to 28 U.S.C.S. § 1404(a) where the language of the forum selection clause was mandatory and the clause was valid and reasonable.