Caspi v. Microsoft Network, L.L.C.

Superior Court of New Jersey, Appellate Division · 1999 · Contracts

ContractsForum selection clausesOnline contractsforum selection clauseclickwraponline assentnoticeconsumer contract

Facts

Before becoming MSN members, prospective subscribers were shown multiple computer screens, including a membership agreement displayed in a scrollable window next to buttons labeled "I Agree" and "I Don't Agree." Registration could proceed only after the user had the opportunity to review the agreement and clicked "I Agree," and no charges were incurred until then. Paragraph 15.1 of the agreement stated that the agreement was governed by Washington law and that users consented to the exclusive jurisdiction and venue of courts in King County, Washington for disputes arising out of or relating to MSN use or membership. Plaintiffs nonetheless sued in New Jersey on behalf of themselves and a proposed nationwide class.

Issue

Whether the forum selection clause in MSN's online membership agreement was valid and enforceable against the plaintiffs, and whether plaintiffs had adequate notice of that clause so that it became part of the contract. Also, whether the notice question was for the court or a jury.

Rule

In New Jersey, forum selection clauses are prima facie valid and enforceable. A court will decline to enforce such a clause only if the objecting party shows that the clause resulted from fraud or overweening bargaining power, enforcement would violate strong New Jersey public policy, or enforcement would seriously inconvenience trial. A party may be bound by a form contract even if the party did not read it, and the adequacy of notice of a forum selection clause is a question of law for the court.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Newark, Maya Patel signs up for a meal-planning website operated by Garden Loop Media. During registration, a scrollable membership agreement appears beside buttons marked "Accept" and "Decline." The agreement states that any dispute relating to membership must be brought exclusively in Denver, Colorado, and the account cannot be activated or charged unless Maya clicks "Accept."

Maya later sues Garden Loop Media in New Jersey, arguing the forum clause is unenforceable because she never bothered to read that part of the agreement. What is the strongest answer?

Explanation. Forum selection clauses are prima facie valid and enforceable. A party may be bound by a form contract even if the party did not read it, so long as the clause was fairly presented and the user had adequate notice and an opportunity to assent. Here, the agreement was displayed on screen, Maya could scroll through it, and activation and charges required clicking assent. That is sufficient notice under the majority's reasoning. (Derived from Caspi v. Microsoft Network, L.L.C. (n.d.).)