Court Enforces Forum Selection Clause in Tradecomet.com v. Google

 Back in 2008, we reported on how Curtis Bridgeman and KarenSandrik think a lot of business-to-consumer form contracts are “bullshit,”which is a technical philosophical term referring to illusory promises.   I often begin my contracts courseby walking my students through Google’s Terms of Service agreement in order toalert them to the hazards of click-through agreements.  Tradecomet.comLLC v. Google, Inc. reveals that things are not very different in the B2Bcontext.  In a March 5, 2010opinion, Judge Stein of the Southern District of New York dismissedTradecomet’s action, ruling that the parties were bound by a forum selectionclause in their August 2006 agreement. Tradecomet will have to bring its antitrust claims in California. 

The forum selection indicates Google’s vast advantages interms of bargaining power.  Notonly does it specify that the agreement will be governed by California law andthat all disputes must be litigated in Santa Clara County, California, it alsospecifies that “THE AGREEMENT MUST BE CONSTRUED AS IF BOTH PARTIES JOINTLYWROTE IT.”  Obviously, both partiesdid not write it, and presumably Google insists on this whopper in order toavoid legal consequences such as claims of procedural unconscionability and contra proferentem construction. 

That forum selection clause was added to the partiesagreement in August 2006 and Tradecomet argued that it should not governbecause the alleged antitrust violations occurred when the parties wereoperating under earlier versions of their agreement, dated April 19, 2005 andMay 23, 2006.   Both earlierversions contained language providing that “Google may modify the Program orthese Terms at any time without liability and your use of the Program afternotice that the Terms have changed indicates acceptance of the Terms.”  The August 2006 Agreement also providesthat it “supersedes and replaces any other agreement, terms and conditionsapplicable to the subject matter hereof.” 

The court found that Tradecomet accepted the terms of August2006 by clicking through text. Tradecoment contended that enforcement of the forum selection clausewould be unconscionable, but the court found that doing so would be neitherunreasonable nor unjust. 

Wait a minute, shouldn’t the case be renamed Tradecomet.com v. Topeka?

[Jeremy Telman]