French Court Affirms 2004 AOL Standard Form Contract Decision

In a judgment released September 15, a three-judge panel of the Versailles Court of Appeal has unanimously dismissed an appeal by SNC AOL France (AOL) from a lower court decision handed down in 2004 in favour of a French consumer protection body, Union Fédérale des Consommateurs "Que Choisir" (UFC), relating to AOL's online subscriber contract in France (AOL Contract). In the case, UFC v AOL France, many different clauses in the standard form contract were at issue, including such fundamental provisions, for example, as those relating to AOL disclaimers of liability (including liability for content information originating from third parties and liability for failure to provide the online service contracted for) and AOL's rights of termination (including the right of AOL to terminate the contract unilaterally). Several of the clauses in the AOL Contract were found to be abusive and unenforceable because they were contrary to French local law or, in some cases, contrary to EU-wide laws such as the Unfair Terms in Consumer Contract Directive of 1993. Under the latter legislation, courts have the power to decline to enforce provisions in consumer contracts that are seen to demonstrate a "significant imbalance" of bargaining power between the parties. While the precise provisions of French and EU consumer protection law differ from those in effect in Canada, it is noteworthy that in Quebec, the concept of the abusive clause in a contract of adhesion is contained in the Civil Code of Quebec in article 1437 and, in part, refers to a provision that is excessive and unreasonably detrimental to the consumer or adhering party and is therefore not in good faith. There is also a somewhat limited but growing use of the concept of good faith in contract law in common law provinces, especially in relation to standard form contracts. In addition, recently revised consumer legislation in Ontario contains specific provisions dealing with contracts entered into over the Internet. While most of the new provisions impose greater disclosure, the question of remedies is also touched on. As a result, for example, a consumer in Ontario, even if there is a mandatory arbitration process in the consumer contract, is now permitted to commence or join a class proceeding. For extracts from the judgment (en français) and a link to the full text of the case, visit: http://www.juriscom.net/jpt/visu.php?ID=741 For the primary provisions of the Ontario Consumer Protection Act which apply to consumer agreements made over the Internet, see: http://makeashorterlink.com/?A107227FB Summary by: The Editor