The choice of forum in general terms and conditions in international B2B relationships: key considerations

Introduction

In international business relationships, parties frequently opt to include a choice of forum clause in their agreements or general terms and conditions. This enables them to designate a specific court, such as a Dutch court, with exclusive jurisdiction to handle any disputes that may arise. Due to the significant implications of such exclusivity, a choice of forum requires an agreement, meaning that they must reach a genuine consensus on the choice of forum. Disputes frequently arise regarding the validity of a choice of forum clause, particularly when such clause is embedded in general terms and conditions. This article provides an overview of the requirements for establishing a valid choice of forum in general terms and conditions and concludes with practical tips for ensuring, as far as possible, the enforceability of such clauses.

Choice of forum in general terms and conditions

As mentioned, disputes frequently arise regarding the validity of forum choices in general terms and conditions. This is partly because it is not always clear whether the other party has accepted the choice of forum.

According to case law of the Court of Justice of the European Union, a choice of forum in general terms and conditions is, in any event, validly made if the text of the agreement concluded explicitly refers to the general terms and conditions containing the choice of forum clause. However, this only applies if such a reference can be verified with ordinary diligence and if the general terms and conditions have been communicated to the other party.

Communication of the general terms and conditions can be achieved by sending them to the other party before or at the time of concluding the agreement. Alternatively, including a working hyperlink in the agreement that directs the other party to a website containing the general terms and conditions also qualifies as adequate communication, provided that the other party can download and print them. Additionally, acceptance of the general terms and conditions must occur prior to or at the time of concluding the agreement.

It is important to note that the question of whether a choice of forum is validly made is distinct from the question of whether the general terms and conditions are applicable. Pursuant to the principle of separability, these questions should be considered separately. Therefore, the mere fact that the general terms and conditions are applicable does not automatically mean that the choice of forum contained therein has also been validly made.

Tips

If you include a choice of forum clause in your general terms and conditions, be sure to:

incorporate an explicit reference to the general terms and conditions in the agreement stating that the other party accepts them by signing the agreement;
have the agreement signed by the other party; and
provide the other party with the opportunity to take notice of the general terms and conditions before signing the agreement, by:

sending the general terms and conditions prior to or at the conclusion of the agreement; or
making the general terms and conditions available via a working hyperlink included in the agreement, allowing them to be downloaded and printed.

For questions or more information, please contact: Rick Dijksterhuis