Canada: Douez v. Facebook: SCC Provides Further Guidance On The Enforceability Of Online Consumer Contracts


The Supreme Court of Canada's recent decision in Douez v. Facebook provides further insights into the enforceability of online consumer contracts, and the perennial tension between the strong public interest in the enforcement of contracts, on the one hand, and consumer protection, on the other.

In this case, Facebook was asserting a provision in its contract with users which designated the courts in California as the exclusive venue in which a user could sue Facebook (i.e., its forum selection clause) in an effort to block a British Columbia class action. In a split decision, a four-to-three majority of the Supreme Court of Canada ruled that the public policy factors at issue in this case justified overriding the forum selection clause in the Facebook user agreement. More specifically, the majority of the Supreme Court justices found that there was strong cause to not enforce the forum selection clause that referred disputes to California, due to (i) the gross inequality of bargaining power between Facebook and the user, and (ii) the public interest in having quasi-constitutional rights to privacy under Canadian law determined by Canadian courts. The three dissenting justices at the Supreme Court, and the three justices on the British Columbia Court of Appeal who had earlier heard the case, disagreed and would have enforced the forum selection clause as requested by Facebook.

The Douez case confirms the deep-seated reluctance of Canadian courts to create uncertainty for online businesses by overriding valid, clear and enforceable terms contained in online contracts, absent strong cause to do so. However, the majority decision gave overriding effect to consumers' interests in the protection of their privacy.  Those doing business online with Canadian consumers will need to carefully consider the compliance of their services with applicable Canadian laws which expressly override contractual terms (as provided for in the Ontario Consumer Protection Act), as well as laws protecting other important consumer interests, such as privacy.  For their part, Canadian legislators may wish to clarify, in the applicable legislation, which consumer "rights" are intended to override the terms of consumer agreements.


Deborah Louise Douez was a B.C. resident and a Facebook user. In 2011, Facebook introduced a new feature known as "Sponsored Stories". If a Facebook user "liked" a post associated with a business, Facebook periodically displayed the user's name and profile photo in an advertisement on the timelines of the user's Facebook friends.

Douez alleged that Facebook's Sponsored Stories contravened section 3(2) of the Privacy Act (British Columbia), which creates a statutory tort when a name or a portrait of a person is used for an advertisement or a sale of product without the person's consent for such use. Douez also sought to certify her action as a class proceeding, where the proposed class consisted of approximately 1.8 million B.C. residents whose names or photos had been used by Facebook in Sponsored Stories without their consent.

Facebook brought a preliminary motion to stay the proceeding, based on the forum selection clause in its terms of use, which stated:

You will resolve any claim, cause of action or dispute (claim) you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for purpose of litigating all such claims.

In the initial judgment, the British Columbia Supreme Court found the forum selection clause to be unenforceable because the Privacy Act provided that despite anything contained in another statute, an action under the Privacy Act must be heard and determined by the Supreme Court of British Columbia.

The British Columbia Court of Appeal reversed the trial decision and ordered the action to be stayed based on Facebook's forum selection clause. The Court of Appeal found that if the legislature intended to override forum selection clauses, it would have done so explicitly in the Privacy Act.

The Supreme Court of Canada Decision

In a split ruling, the majority led by Justices Karakatsanis, Wagner, and Gascon of the Supreme Court (with Justice Abella concurring in the result but for different reasons) reversed the Court of Appeal's decision and found the forum selection clause to be unenforceable. In applying the two-step test established by the Supreme Court in Pompey Industries v. ECU-Line N.V.,1  Justices Karakatsanis, Wagner, and Gascon found that there was a "strong cause" to not enforce the forum selection clause, under the second step of the test.

a.    The Pompey Test

When there exists no legislation overriding a forum selection clause, courts apply the two-step approach to determining the enforceability of a forum selection clause outlined by the Supreme Court in Pompey:

  1. The party seeking to stay a proceeding by relying on a forum selection clause (the defendant) must prove that the forum selection clause is valid, based on the principles of contract law.
  2. If the clause is found to be valid under contract law, the onus shifts to the plaintiff to demonstrate a "strong cause" why the court should not enforce the forum selection clause. At this stage of the test, the court must consider all circumstances, including the convenience of the parties and the interests of justice.

b.    The Majority Decision

Although the majority overturned the Court of Appeal's decision, it agreed with the Court of Appeal that the Privacy Act does not in itself override all forum selection clauses, because it lacks clear and specific language doing so.

In its decision, the majority modified the "strong cause" factors considered in the second step of the Pompey test to include the following factors when reviewing forum selection clauses in consumer contracts of adhesion:

a)    the gross inequality of bargaining power that exists between the parties; and
b)    the nature of the rights at stake.

The majority focused on the unequal bargaining power of the parties—where the consumer relinquishes her rights without having any opportunity to negotiate—as the justification for modifying the Pompey test in the consumer context.

Applying the modified Pompey test, the majority found that there were two compelling public policy considerations in the second step to find "strong cause" not to enforce the forum selection clause:

a)    The gross inequality of bargaining power in consumer contracts of adhesion (where the consumer must agree to non-negotiable standard forms on a "take it or leave it" basis).  The majority also remarked that the ubiquity of social media could mean that "having the choice to remain 'offline' may not be a real choice in the Internet era".
b)    The quasi-constitutional right of privacy provides strong policy considerations for a local court to adjudicate the matter. Because Douez's claim involved interpreting a statutory privacy tort, only a local court's interpretation would provide clarity and certainty of the scope and rights in the province.

The majority also found that the "secondary factors" such as interests of justice, as well as the comparative convenience of litigating in the alternate forum, supported the B.C. court hearing the case.

c.    Abella's Concurring Opinion

In a concurring opinion, Justice Abella agreed with the result of the majority, but found that the Privacy Act provided exclusive jurisdiction to the B.C. courts to hear all cases brought under the Privacy Act, rendering the forum selection clause invalid. She also found that the forum selection clause would fail at the first step of the Pompey test as being invalid, for being unconscionable due to the inequality of bargaining power between the parties and unfairness.

Consistent with the majority view, Justice Abella focused on the "automatic nature of the commitments" made with the type of contracts signed with Facebook, which should intensify the scrutiny given to clauses that may impair the consumer's access to possible remedies. Justice Abella also identified additional factors such as added costs, logistical delays provided by the "burdens of geography" brought on by forum selection clauses that would invite additional scrutiny from a court.

The Dissent

Justices McLachlin, Côté and Moldaver wrote a strong dissenting opinion, finding that the forum selection clause was valid and enforceable under the Pompey test. In considering the first step of the Pompey test, they found the forum selection clause was valid and enforceable under principles of contract law for four reasons:

a)    The act of giving a click to consent to a forum selection clause (without necessarily having the specific forum selection clause brought to the user's attention) was an accepted practice in common law, which had already been codified by the Electronic Transactions Act in B.C. 
b)    The B.C. legislature had not adopted a protective approach to jurisdiction in the Privacy Act, as there was no clear language that ousted forum selection clauses specifically in the Privacy Act.
c)    Inequality of bargaining power does not in itself create unconscionability, as there needs to be inequality and undue influence, as well as an actual bad bargain in the form of substantive unfairness for unconscionability to exist.
d)    There are strong public policy considerations for enforcing forum selection clauses, as forum selection clauses ensure the certainty and predictability in cross-border transactions.

In their analysis of the second step of the Pompey test, the dissent found that forum selection clauses are not contrary to public policy, since they are vital to international order and comity by mitigating uncertainty and unpredictability in determining jurisdiction for online companies.

The dissent also disagreed with how the majority focused on the inequality of bargaining power in the second step of the Pompey test, because this conflates the first step of the Pompey test with the second; inequality of bargaining power should be considered at the first step of the Pompey analysis in determining the enforceability of the clause, not with the "strong cause" considerations.


The decisions of the justices in the Douez case (with the possible exception of that written by Justice Abella) confirm the respect accorded by Canadian courts to the terms of valid online agreements, and the very strong public interest in the enforcement of such contracts. However, the Douez case also reinforces that courts will consider important public policy considerations when determining whether to uphold provisions in online consumer contracts of adhesion, and the split decision provides arguments for use from all sides.

While the justices (again, with the exception of Justice Abella) found the Facebook agreement to have been validly entered into by the parties, the case reminds us of the need to clearly and unambiguously present the relevant terms and conditions and to document the agreement of the consumers with such terms. Even though such measures will not preclude an adverse ruling on policy grounds, online companies may wish to draw the attention of consumers to key clauses (such as forum selection clauses) by highlighting such clauses in larger fonts, by placing them at the beginning of the agreement, or by requesting express consents to such clauses.

The case also serves to remind those doing business online with Canadian consumers to carefully consider the compliance of their products and services with applicable Canadian laws (and to obtain the advice of Canadian counsel on such matters).  The result in this case is consistent with the provisions of certain Canadian consumer protection laws, for example, the Consumer Protection Act in each of Ontario and Quebec, which expressly override any contractual terms that could be construed as purporting to prevent consumers from commencing or becoming a member of a class proceeding. The case also reiterates the Supreme Court's characterization of privacy as a quasi-constitutional right, which merits a higher level of protection than is afforded to mere commercial interests.  Stay tuned for further developments in this case (as the class action has yet to be certified) and to see whether forum selection clauses, or other clauses, will be overridden on policy grounds in subsequent cases.

Finally, Canadian legislators who want legislation to trump contracts should make it expressly clear, in the applicable legislation, which provisions are intended to override the terms of consumer agreements and to provide Canadian consumers with the right to bring cases in Canadian courts.

Goodmans Tech Group

To assist clients in the technology sector, Goodmans brings together our acknowledged expertise in corporate/commercial, private equity, corporate finance, mergers and acquisitions, outsourcing, licensing, intellectual property, privacy, regulatory and media, tax, litigation, human resources, corporate restructuring and administrative law. We do so both for innovative businesses in their start-up phase and for well established businesses of all types. Goodmans continues to lead in the technology sector and is partnered with the DMZ at Ryerson University. The DMZ is a leading business incubator (selected by UBI as the top-ranked university incubator in North America, and third in the world), which connects its startups with resources, customers, advisors, invertors, and other entrepreneurs. Goodmans is also a proud partner of IDEABoost, an initiative of the Canadian Film Centre's Media Lab; building the next generation of technology-based media entertainment products, services and brands. Through these partnerships, Goodmans provides legal advice, mentorship and networking opportunities to assist startups in maximizing their potential. Outsourcing technology functions and technology procurement is also a major strength of Goodmans, where we have assisted technology users to transform their businesses. Finally, Goodmans has represented in court and in arbitrations major technology providers, and users of technology, in ground-breaking cases that have made important contributions to the development of technology law.  Members of our Technology Group teach internet and communications law at Canada's largest law schools, are regular lecturers at technology industry events and legal conferences, and have published articles in the technology law field.


1 2003 SCC 27, [2003] 1 S.C.R. 450 [Pompey]

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions