Internet Dispute: Forum-Selection clause and denial of justice in web-signed contracts

The rules of Private International Law contain elements to establish the jurisdiction to which a particular matter, related to an international dispute, shall be referred to. Parties involved in a legal relationship, however, can modify the jurisdiction defined in such rules by including, in a contract, a clause in which they choose a different court, from another jurisdiction, to settle the dispute between them. That is called “forum-selection”.
Such clauses make it possible for parties in private contracts to ascertain which body of rules will be applied in the event of a legal dispute, as well as the location where it will be settled, promoting business certainty for the contracting individuals. For these reasons, those clauses are very common.
Regarding specifically legal transactions concluded through Internet platforms, the Terms of Use agreements between users and businesses deserve attention. These documents intend to regulate how the relationship between the contracting parties will be and, among others, provide the privacy and the advertising policies of the company. Increasingly present in our daily lives, Terms of Use often elect a jurisdiction other than the one in which the user is domiciled to settle any disputes, which often causes problems regarding the protection of consumer rights and the access to justice.
Twitter Terms of Service, for example, establishes that the legal relationship between the company and its users is governed by the laws of the State of California, USA, and that any conflicts should be settled by the Court of that State. As an example, this norm may imply, in practice, the impossibility of a Brazilian user to file a law suit in order to be compensated from an injury caused inside Twitter, due, among other, to the high costs it would involve and to the difficulty caused from the use of a different language.
One may question: whether forum selection clauses used in Terms of Use and some online contracts can result in serious problems for users and consumers, why would they still agree with such provisions? The truth is many users do not actually read the contracts, because they are large documents and often written in a language difficult to understand.
Furthermore, companies formulate unilaterally its Terms of Use and contracts, which ensures them power to promote their own interests, not necessarily coincidental with their users’. That reality creates extremely unequal conditions between the contracting parties, which is not noticed users who do not read the documents. On the other hand, even careful users that actually read the drafts submitted to them have no opportunity to negotiate contract clauses, having to accept default terms that are not favourable to them in order to guarantee access to the desired good.

How does Brazilian Law addresses the issue?

At first sight, the “I read and accepted” declaration made by users in Terms of Use and contracts signed through the Internet symbolize their autonomy of will and state that they accept all contractual terms, including the forum-selection clause. In that direction, the Brazilian New Code of Civil Procedure’s article 25 ascertains that the Brazilian judicial authority is not competent to decide on lawsuits brought before it concerning an international contract that contains an exclusive foreign.
However, the analysis of the issue in light of Brazilian substantive law allows conclusion to the contrary. Among the legal requirements under Brazilian law for the validity of a legal transaction is the statement of intent, which must be held in a free and conscious way, without the occurrence of any defect of consent. Once the consumer or user is unable to negotiate unfavourable terms, there is no effective manifestation of will.
The use of difficult to understand legalese often used in the drafting of contracts and Terms of Use also violates national law. The Consumer Protection Code, article 6, III, addresses the necessity of providing consumers with clear and accurate information about products and services. Moreover, a different provision of the Code defines as “abusive” any clause that restricts any fundamental rights or obligations inherent to the nature of the contract, in such a way as to threaten its object or contractual balance.
Although it does not address the Terms of Use issue specifically, The Brazilian Civil Rights Framework for the Internet (Federal Law 12.965/14) provides, in its Article 7, the right of users to clear, complete and detailed information.
In this sense, it is possible to conclude that the forum-selection clause may be voided if it results in imbalance between the contracting parties, such as Twitter’s clause does, for example. The same is possible if a defect of consent is found in the declaration of will and when the user or consumer is not able to understand to what he or she consented because of obscurity.

Access to Justice

Access to justice is a human right recognized internationally in several treaties and conventions. The American Convention on Human Rights provides in its Article 25 that “everyone has the right to simple and prompt recourse or any other effective remedy before the competent court or tribunal for protection against acts that violate their fundamental rights “. The right to receive reparation is also in Article 13 of the European Convention and in Article 2 of the International Covenant on Civil and Political Rights.
Based on the above legal norms, it can be said that access to justice can be divided into two parts. The first one, of a formal nature, concerns a right held by the applicant to reach the judicial courts. The second one refers to the idea of material justice, according to which the applicant has the right to effective judicial assistance with access to legal means that are efficient, able to settle his or her dispute and to guarantee the protection of his or her rights.
In Brazil, the State reserved for itself the monopoly on the exercise of judicial power in article 5, XXXV, of the Federal Constitution, “the law does not exclude from review by the Judiciary any injury or threat of injury to a right.” It is possible to conclude, therefore, that the Brazilian State has the burden of providing the applicant with a real and simple possibility of accessing court proceedings and taking measures to remove any impediment or hindrance for him or her to do so.
In that sense, for implying a denial of justice, clauses or international agreements that withdraw party access to judicial protection should be declared void by the States.