THE ADVOCATE 357
VOL. 76 PART 3 MAY 2018
an arbitration clause, may be required to arbitrate some or all disputes
under the contract.64 In many cases, a consumer party will be required to
travel to another geographical location to do so. Yet under a modified strong
cause test, the courts will have significant leeway to relieve consumers
from forum selection clauses and the burden of litigating outside their
So in addition to differing approaches to the enforceability of arbitration
clauses in consumer contracts across the country, arbitration clauses and
forum selection clauses are subjected to different tests in this context.
Are the policy imperatives in favour of enforcing forum selection clauses
on the one hand (i.e., freedom of contract, certainty and security of transactions,
comity and principles of order and fairness) and arbitration clauses
(i.e., freedom of contract, certainty and security of transactions and promotion
of alternative dispute resolution nationally and internationally) sufficiently
divergent that a different approach to their enforcement in consumer
contracts makes sense? Perhaps it is time for a uniform legislative approach
to both arbitration and forum selection clauses in consumer contracts.
The question most practitioners would undoubtedly like answered first is
whether they should continue to include forum selection clauses in consumer
contracts and online contracts of adhesion where consumers are a
likely class of counterparty. The answer is that they should. While forum
selection clauses in consumer contracts may be more vulnerable to attack
post-Douez, the nature of the SCC split decision and the particular facts in
Douez mean that such clauses are not invariably unenforceable.
The lack of deference by the three members of the KWG Panel to the
forum selection clause was linked expressly to the quasi-constitutional
nature of Ms. Douez’s claim and the fact she entered into an online contract
of adhesion. Those factors also influenced Abella J.’s conclusion that the
forum selection clause was invalid. Thus, it is not clear whether there is a
modified strong cause test applicable to forum selection clauses in consumer
contracts generally or not.
Based on the approach taken in other jurisdictions, including Australia
and the European Union, it would not be surprising if Canadian courts
chose to apply a modified strong cause test in the consumer context going
For commercial contracts, it should be business as usual: application of
the original strong cause test will mean that forum selection clauses in
these types of contracts will be enforceable almost invariably.