N.D. Cal. Validates Forum Selection Clause In Website’s Hyperlinked Terms Of Use

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On April 11, the U.S. District Court for the Northern District of California held that the forum selection clause within a website’s terms of use provisions, which an online customer had to accept in order to proceed with the transaction, is valid and supports a transfer of the case to another forum. Moretti v. Hertz Corp., No. 13-2972, 2014 WL 1410432 (N.D. Cal. Apr. 11, 2014). An online customer filed a putative class action in California state court against a car rental company and a travel website over a price disclosure dispute. The companies removed the action to federal court and sought to transfer the case to Delaware based on a forum selection clause included in the terms of use provisions on the travel website through which the car rental was arranged. In support of the motion to transfer, the travel website provided employee declarations establishing that the terms of use included a forum selection clause, and that the transaction could not have been completed unless the customer clicked a box to accept the terms of use. The court held that even though the terms of use were provided through a hyperlink on the site, in the absence of affirmative denial from the customer that he did not click to accept the terms of use, the customer had notice and consented to the terms and the forum selection clause contained therein. The court granted the defendants’ transfer motion and ordered the case transferred to the District Court of Delaware.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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