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I was reading a contract from a particular large merchant service provider, and found an interesting clause in their developer portal terms & conditions which reads as follows :

You agree that you may bring or participate in claims against Moneris in your individual capacity only and not as a plaintiff or class member in any purported class or representative proceeding. Unless you and Moneris agree otherwise, the arbitrator(s) may not consolidate or join the claims of other persons who may be similarly situated, and may not preside over any form of a representative or class proceeding.

Is something like this even enforceable ? I understand you can put lots of stuff into agreements which seem like you are losing your rights, yet are not enforceable. For example a company could put in "You agree that your life is forfeit if you do not pay within 10 business days", while the user agreed to the terms of service, this is clearly illegal to the extent it may negate the legitimacy of the entire legal blah.

Is a clause in someones terms and conditions that explicitly forbids participation in class action suits against the respective company, enforceable ?

  • Are class actions available under civil legal systems (i.e. European law)? I thought they were a common law (i.e. English) procedure? – Dale M Sep 2 '16 at 3:19
  • @DaleM - I am unsure of the difference there. It just seems that something like this should not be enforceable as it is an attempt to circumvent a litigation type. Of course no-one wants to get sued, under any pretense, however when up against a large corporation, sometimes the only way to get any type of result would be class action (as lawyer fees for a single person vs {large corp with expensive lawyers breaches the affordability level for many people, making litigation other than class action improbable ). – Kraang Prime Sep 2 '16 at 14:59
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    @DaleM: Yes. They originated in common law but the Netherlands now accepts class actions _with global working_(!) It's sufficient to have a significant Dutch interest, but class members are not restricted to Dutch persons or entities. That said, under Dutch law this clause would be acceptable but likely unnecessary. Dutch class actions are more voluntary. That might sound crazy, but it can be an effective way to settle 10.000+ lawsuits with a single verdict even when you lose. – MSalters Oct 7 '16 at 23:46
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Depending on the jurisdiction - yes, this may be enforceable. In most cases, if you have contractually agreed to a proper law for the contract, then that is the law that will apply.

In those cases, if the proper law is California, for example, then that is the legal system that will apply and in these cases, if you attempted to bring or join a class or representative action, the other side could produce this as evidence to support summary dismissal of it.

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This clause may be legal in some jurisdictions (e.g. USA) and illegal (and an offense to include) in others (e.g. Australia) on the basis that it purports to exclude the jurisdiction of the courts. Even if the contract contains an agreement that it will be subject to the law of say California this will not help as Australian Consumer Law provides statutory remedies not excludable by contract.

This illustrates the difficulty of trying to write one size fits all terms for an online service where the vendor may not know which laws will apply to a given transaction.

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