Judgment of Mr. Justice Michael Hanna dated the 26th day of February,
2010
On Friday the 12th day of February, 2010 I informed the parties that I
was finding for the Plaintiff who is the Respondent in the motion relating
to a preliminary jurisdictional issue brought by the Defendant. I said I
would give my detailed reasons later and I now do so. These proceedings
were heard in tandem with related proceedings bearing Record No.
7960P/2009 and entitled Ryanair Limited v. Ticket Point Reisebüro GmbH.
In both sets of proceedings, the defendants brought an application to
have the plaintiff’s proceedings dismissed for want of jurisdiction by
virtue of the provisions of Regulation 44/2001 on Jurisdiction and the
Recognition and Enforcement of Judgments in Civil and Commercial
Matters (“the Brussels Regulation”) as transposed into Irish law by the
European Communities (Civil and Commercial Judgments) Regulations,
S.I. No. 52 of 2002. It is with that application which this judgment is
concerned.
The defendants rely on Article 2 of the Brussels Regulation which provides
that a defendant should be sued in its own domicile. The defendants in
these proceedings are German based and say that they should be sued in
Germany, not in Ireland. The plaintiff claims that while the general rule is
that a defendant should be sued in their domicile, a number of exceptions
to that general rule exist and in this regard the plaintiff seeks to rely on
Articles 5(1), 5(3) and 23.
The only issue I have to determine at this juncture therefore is whether or
not this Court has jurisdiction to hear these proceedings pursuant to the
Brussels Regulation.
The Plaintiff’s Claim
The plaintiff claims the service offered by the defendants, whereby
they run a price comparison website allowing users of their site to
compare prices for flights, breaches the plaintiff’s website’s Terms of Use,
trademark, copyright and database rights in that it takes information
from the plaintiff’s site, an activity known as “screen-scraping, and
provides that information to its users for a fee. All of this is done without
the permission of the plaintiff and, according to the plaintiff, in breach of
its website’s Terms of Use.
One of the issues which may ultimately fall to be determined by this Court
if the plaintiff overcomes the initial hurdle of defeating the defendant’s
jurisdiction application, is whether or not the plaintiff’s website’s Terms
of Use constitute a valid and legally binding contract which was entered
into by the defendant’s through their use of the said website. The plaintiff
says, however, that in order to determine the jurisdiction issue, it is
not necessary for the Court to adjudicate upon the validity of the Terms
of Use but rather it shall be sufficient if the Court is satisfied as to the
existence of a valid exclusive jurisdiction clause set out within that
document. The plaintiff in this regard relies upon paragraph 7 of the
Terms of Use which provides that the courts of Ireland are to have
exclusive jurisdiction in respect of any dispute.
The Defendants’ Case
The defendants claims that there is no contract in existence between
the parties and that the plaintiff’s Terms of Use lack contractual effect
because they were never agreed or consented to by the defendants.
The defendants say the plaintiff’s website’s Terms of Use cannot form
the basis of a contract because all of the traditional features of a legally
binding contract are absent such as the date on which it may be said that
a contract was entered into between the parties and the absence of any
consideration. They say that as there is no legally enforceable contract in
place between the parties to these proceedings, the plaintiff cannot rely
on Article 23(1) of the Brussels Regulation to confer jurisdiction on this
Court because of the absence of an agreement.
The Brussels Regulation
Article 23 of the Brussels Regulation provides:
“If the parties, one or more of whom is domiciled in a Member State,
have agreed that a court or the courts of a Member State are to have
jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts
shall have jurisdiction. Such jurisdiction shall be exclusive unless the
parties have agreed otherwise.” (Emphasis added)
If Ryanair’s website’s Terms of Use can be said to be an “agreement”,
then the parties are in a legal relationship and the dispute that has arisen
from the use of Ryanair’s website falls to be governed by the exclusive
jurisdiction clause contained within that agreement.
The Case-law
In Ryanair Ltd. v. Bravofly and Travelfusion Ltd. [2009] IEHC 41,
the second named defendant brought an application to dismiss the
proceedings against it for want of jurisdiction under the Brussels
Regulation. Travelfusion was based in the UK and the relevant jurisdiction
clause in Ryanair’s website’s Terms of Use at that time specified the UK
Courts as having exclusive jurisdiction over any disputes arising as a
result of the breach of those terms. Travelfusion therefore sought to
have the Irish proceedings against it dismissed for want of jurisdiction in
favour of the UK courts pursuant to the exclusive jurisdiction clause set
out in Ryanair’s Terms of Use. Ryanair have since changed their Terms
of Use to nominate Ireland as the appropriate jurisdiction in the event
of a dispute. In Bravofly, it was argued successfully by Travelfusion that
a choice of jurisdiction clause must be upheld and given effect to even
though one party may be challenging the validity of the entire contract
including the validity of the jurisdiction clause. Ironically, in an attempt
to defeat Travelfusion’s jurisdiction application, it was Ryanair who put
forward an argument in that case that the requirements of Article 23 had
to be strictly construed, in particular with regard to whether there was
a consensus between the parties in relation to the clause, an argument
which is now being advanced by their opponents in these proceedings.
Clarke J. held that there was sufficient consensus as to the exclusive
jurisdiction clause and granted Travelfusion’s application to have those
proceedings against it dismissed for want of jurisdiction.
In Estas Salotti v. Rua [1976] ECR 1831, the European Court of Justice
held, at para. 7 of the judgment, that Article 23:
“… imposes upon the Court before which the matter is brought the duty of
examining first, whether the clause conferring jurisdiction upon it was in
fact the subject of a consensus between the parties which must be clearly
and precisely demonstrated.”
Again, in Benincasa v. Dentalkit [1997] ECR I-3767, the European Court
of Justice explained, at paras. 28 and 29, that Article 23 should be
interpreted strictly, since the purpose of the Article is to designate, clearly
and precisely, a court in a Contracting State which is to have exclusive
jurisdiction in accordance with the consensus between the parties. The
Benincasa decision is of particular significance to the issue before the
Court here as in that case, the ECJ had to consider whether the courts
of a Member State specified in a jurisdiction clause can have exclusive
jurisdiction, pursuant to what was then Article 17 and is now Article 23,
where there was a dispute as to the validity of the agreement setting
out that clause. The ECJ found that a distinction must be drawn between
a jurisdiction clause and the substantive provisions of the contract in
which it is incorporated and that a validly concluded jurisdiction clause
remains valid despite either party seeking a declaration that the contract
which contains the clause is void. Hence, while the defendants in this
case dispute the existence of a valid contract and indeed say that there
was never any agreement entered into by the parties, the jurisdiction
clause is severable and distinct from the agreement in terms of validity
and capable of surviving independently of it. The Court therefore must
pay special attention to the exclusive jurisdiction clause in the plaintiff’s
website’s Terms of Use, notwithstanding the fact that the defendants
dispute that document’s validity. In Bravofly, Clarke J. also quoted
from the decision of the ECJ in Soc.Trasporti Castelletti Spedizioni
Internazionali SA v. Hugo Trumpy SpA [1999] ECR I-1597, where at
paras. 48 to 51, it was stated:
“As the court has repeatedly stated, it is in keeping with the spirit of
certainty, which constitutes on of the aims of the Convention that the
national court seised should be able readily to decide whether it has
jurisdiction on the basis of the rules of the Convention, without having to
consider the substance of the case.”
In addition to the case law of the European Court of Justice, the Court
also has regard to a number of American authorities referred to by the
plaintiff on the issue of exclusive jurisdiction clauses in website terms of
use or terms and conditions. Given the dearth of case law on this issue
in this jurisdiction, the Court has found the jurisprudence of the U.S.
courts useful. In Decker v. Circus Circus Hotel 49 F. Supp. 2. d 743, the
plaintiffs brought a personal injury action against the defendants in the
State of New Jersey arising out of an accident which occurred in Nevada.
The plaintiffs entered into the relevant contract with the defendant
via the defendant’s internet website. Judge Walls of the United States
District Court in the District of New Jersey deemed the jurisdiction clause
contained in the contract entered into over the internet was enforceable
and the matter was transferred to Nevada.
In Caspi v. Microsoft Corporation 323 N.J. Super. 118, 732 A.2d 528,
the Superior Court of New Jersey, Appellate Division, was asked to
determine the validity of an exclusive jurisdiction clause contained
in an online subscriber agreement of Microsoft. The clause stated
that proceedings were to be heard in the State of Washington. Before
subscribing to Microsoft’s online service a user was required to click “I
Accept”. Registration could only occur after this. The Court took the view
that the ordinary contract law principles ought to apply and the fact
that the contract was entered through the medium of the internet made
no difference. The exclusive jurisdiction clause was therefore deemed
enforceable.
In Specht v. Netscape 306 F.3d 17, Judge Sotomayor of the United States
Court of Appeals (as she then was) held that it was more likely than not
that a user of the website in question would not scroll down the webpage
sufficiently enough to see the software licence terms which were placed
below the download button they would have to press in order to download
the product they were looking for. In other words, the terms in question
were not readily identifiable or sufficiently visible to the users of the
website and were placed in such a position on the webpage that a user
may never see or look at them before the transaction was completed
by the clicking on the download button. In Specht, the Court addressed
the issue of having knowledge of and therefore being bound by terms of
use. The Court referred to the manner in which traditional contracts are
formed and then provided a useful analysis of contracts formed over the
internet as follows, at p. 16:
“These principles apply equally to the emergent world of online product
delivery, pop-up screens, hyperlinked pages, clickwrap licensing,
scrollable documents, and urgent admonitions to ‘Download now!’”
And at p. 20, Judge Sotomayor said:
“Reasonably conspicuous notice of the existence of contract terms and
unambiguous manifestation of assent to those terms by consumers are
essential if electronic bargaining is to have integrity and credibility.”
Here, Ryanair argue that the terms were clearly visible to all visitors
to and users of their website. They say that in carrying out the screen-
scraping activity, the defendants were making use of the website for
their own commercial advantage and as such that use constitutes an
unambiguous manifestation of assent to its terms.
In Forrest v. Verizon Communications Inc. 805 A.2d 1007, the District
Court of Columbia commented, at p. 6, that:
“A contract is no less a contract simply because it is entered into via a
computer”
In Register.com Inc. v. Verio Inc. 356 F.3d. 393, a decision of the United
States Court of Appeals, Second Circuit, the plaintiff company provided
an internet domain search facility. A person who conducted a search
for a domain name would receive a reply together with a statement of
terms providing that the information only be used for lawful purposes.
It was claimed that the defendants breached these terms. The court
was of the view that it is not necessary to click “I Accept” in order to
manifest acceptance of an offer. Rather, in keeping with traditional
contract principles, conduct in the form of making repeated searches in
the knowledge of the existence of the terms of use bound the offeree to
the terms.
Do the Terms of Use constitute an Agreement for the purpose of Article 23
of the Brussels Convention?
In order to find that Article 23 applies, the Court must first be satisfied
as to the existence of a contract between the parties and the existence
of a contract is strenuously denied by the defendants who argue that the
Terms of Use on Ryanair’s website lack contractual force because they
are nothing more than a set of unilaterally imposed conditions which they
never agreed to. I find this argument unconvincing. By way of analogy,
if I enter a shop and see an item on sale for €10, the fact that I never
agreed to the €10 price tag or the fact that the shop owner unilaterally
imposed that price without consulting me about it does not mean that
I am not bound to pay that price if I go to the counter and seek to buy
the product. In today’s market, given the change in economic conditions,
it may very well be that we have a return to a system of haggling but
as matters stand, the defendant’s argument that one cannot impose
certain unilateral terms is not an accurate description of the law on
contract as I understand it. It will often be the case that one party will
set out certain terms, such as not using information on a website for
commercial purposes without the owner’s consent, and if another party
wishes to flout those terms, they cannot then say that because the term
was unilaterally imposed, it had no legal effect. That seems to me to be
what the defendants in this case have been attempting to argue.
The defendants claim that they never consented to the Terms of Use or
entered into any agreement with the plaintiff. The plaintiff says this is
not the case and that at all material times its Terms of Use governed its
relationship with the defendants. As regards whether or not the Terms
of Use were binding on the defendant, it is a well established general
principle of law that parties to a contract cannot be bound by terms
which they have not had an opportunity of reading prior to making the
contract. That is not to say that a party will not be bound because they
have not read the terms – they will only escape being bound if they can
show they were not afforded a reasonable opportunity to read the term in
question before entering into the contract. In Interfoto Picture Library Ltd.
v. Stiletto Visual Programmes Ltd. [1989] QB 433 it was held that where a
condition is particularly onerous or unusual, the party seeking to enforce
it must show that that condition was fairly brought to the notice of the
other party. As per Dillon L.J., at p. 439:
“… if one condition in a set of printed conditions is particularly onerous
or unusual, the party seeking to enforce it must show that that particular
condition was fairly brought to the attention of the other party.”
Similarly, in Thornton v. Shoe Lane [1971] 2 WLR 585, a case involving an
exclusion of liability clause and a ticket issued by an automatic machine in
a car park, Lord Denning M.R. made the following observations, at p. 588:
“The customer pays his money and gets a ticket. He cannot refuse it. He
cannot get his money back. He may protest to the machine, even swear
at it. But it will remain unmoved. He is committed beyond recall. He was
committed at the very moment when he put his money into the machine.
The contract was concluded at that time. It can be translated into offer
and acceptance in this way: the offer is made when the proprietor of the
machine holds it out as being ready to receive the money. The acceptance
takes place when the customer puts his money into the slot. The terms of
the offer are contained in the notice placed on or near the machine stating
what is offered for the money. The customer is bound by those terms as
long as they are sufficiently brought to his notice before-hand, but not
otherwise.”
In Thornton, the House of Lords held that the defendant’s had not taken
sufficient steps to ensure that the notice containing the exclusion of
liability clause was brought to the attention of customers of the car-
park before they purchased their tickets and in those circumstances that
the clause was invalid and of no effect. Here, the exclusive jurisdiction
clause was contained in the Terms of Use on the plaintiff’s website,
highlighted by way of a hyperlink. In such circumstances, the Terms of
Use on Ryanair’s website were “fairly brought to the attention of the other
party”. It seems that the Terms of Use were clearly accessible by way of
a hyperlink which was at all times clearly visible to users of the plaintiff’s
site. The Terms were not hidden in an awkward part of the screen or in
any way concealed or difficult to find. The inclusion by Ryanair of their
website terms of use via a hyperlink that the website user is required
to view and assent to results in the user entering into what is known as
“a click-wrap agreement” with Ryanair. The plaintiff referred to the U.S.
cases of Caspi v. Microsoft Network 323 NJ Super. 118; 732 A. 2d 528
(New Jersey Appellate Division, 1999) and Specht v. Netscape & AOL
306 f. 3d 17 in this regard. In addition to claiming that the terms of use
lacked contractual effect, the defendants also argued that regardless
of the validity of the terms, they did not “use” the plaintiff’s website,
the customer did. In this regard, while the defendants may not be the
actual customer or person who will sit on the seat in the plane, they
are commercial entities who nonetheless engage with the plaintiff’s
website for the purpose of gleaning or “scraping” information from it for
onward transmission to their own customers. To claim that that activity
is not “use” of the plaintiff’s website by the defendants is an exercise in
semantics and an unconvincing argument.
In resolving this issue of the validity of the plaintiff’s Terms of Use,
the Court has had regard to the traditional contract principles of
offer, acceptance and consideration and has asked itself what was the
consideration provided in the instant case? The defendants claim there
was no consideration, or, for that matter, no acceptance.
Consideration must be provided by the party who seeks to enforce
the contract. Here, Ryanair are seeking to enforce their Terms of Use.
Ryanair, therefore, must satisfy the Court that they have provided the
defendant with consideration. It seems to me that the plaintiff, through
their website, offer information for use, subject at all times to their Terms
of Use policy, to the users of their website, including the defendants.
Although the defendants deny that they use the plaintiff’s website and
claim that it is the customer or the consumer who does so, it again seems
to be that the defendants accept the offer of information made by the
plaintiff when they systematically access the Ryanair website though the
screen-scraping mechanism. In my view, the provision of information as
to flights and prices of flights by Ryanair on their site, subject at all times
to their Terms and Conditions, constitutes a sufficient act of consideration
for the purposes of making the contract legally binding.
I therefore find for the plaintiffs on the issue of whether or not a legally
binding contract exists in this case, being convinced for the reasons
set out above that the Terms of Use constitute a contractual document
entered into by the parties and in respect of which consideration was
provided by the plaintiff in the making available of the information for use
by the defendant.
Is the exclusive jurisdiction clause binding?
As the Terms of Use have contractual effect, it follows from that the
exclusive jurisdiction clause contained therein is also binding. In Bravofly,
referred to above, Clarke J. made the following helpful observations with
regards to exclusive jurisdiction clauses:
“.. it is said a contract in which a jurisdiction clause is located may be
held to be voidable or otherwise unenforceable but not the jurisdiction
agreement within it. The principles in Benincasa were applied by Laffoy
J. in Minister for Agriculture v. Alte Leipziger [1998] IEHC 45, as the
fundamental principles which must guide a court in determining issues in
relation to jurisdiction clauses under the Brussels Regulation.”
I would therefore find for the plaintiff on this point also.
Was there an assent to jurisdiction?
The plaintiff argued that they do not need to show the existence of a
valid agreement at this stage and that once they can show an assent
to jurisdiction, then the exclusive jurisdiction clause will have effect.
Again, I find for the plaintiff on this point. The defendants used the
plaintiff’s website. They access the site and screen-scraping activity is
routinely carried out. The information gleaned therefrom is used for a
commercial purpose as a result of which the defendant makes a profit or
earns a fee. By using the site in this way, the defendants must be taken
to have assented to the plaintiff’s website’s Terms of Use. In this case,
we are dealing with commercial entities and the existence and effect of
the website’s Terms of Use are clear and unambiguous. If you use the
site, you agree not to breach its terms and if you do so, the exclusive
jurisdiction clause set out in the Terms of Use make is clear that Ireland is
the appropriate jurisdiction for the purposes of litigating any disputes that
may arise as a result.
Conclusion
The exclusive jurisdiction clause contained in the plaintiff’s website’s
Terms of Use was binding on the defendants in circumstances where those
Terms were at all times available for inspection by the defendants as
users of or visitors to the website, the plaintiff having taken appropriate
steps to ensure that the Terms were brought to the user’s attention
through their inclusion on the website via a clearly visible Hyperlink. As
I have found that the Terms of Use formed a legally binding agreement
for the purposes of Article 23 of the Brussels Convention and as the
exclusive jurisdiction clause contained therein was at all times available
for inspection by the defendants, I would dismiss the application for an
order dismissing the plaintiff’s claim for want of jurisdiction.