Online boilerplate contracts and the muddle of judicial policymaking
The SCC’s 2017 ruling in Douez v. Facebook continued an unfortunate trend in judicial policymaking that is doing more harm than good.
In Facebook, Justices Karakatsanis, Wagner, and Gascon modified the “strong cause” prong of the Pompey test in the consumer context. They argue that “public policy considerations relating to the gross inequality of bargaining power between the parties and the nature of the rights at stake “warrant a modified approach, “even if the circumstances of the bargain do not render the contract unconscionable at the first step.”
MacLean notes that Justice Rosalie Abella’s concurring reasons are more compelling in that they prioritize basic contractual principles, but problematic nonetheless in the context of boilerplate agreements:
Virtually every normative justification for the judicial enforcement of contracts is premised on the free and voluntary nature of the underlying transactions. As a matter of coherent contract law doctrine, it is simply not tenable to examine—as Abella attempts—the invalidating effects of no bargaining, no choice, and no consent only in relation to the forum selection clause, and “not for the purpose of invalidating the contract itself.” This move is as artificial and inconsistent with basic contract law principles as is Justices Karakatsanis, Wagner, and Gascon’s “preference” to deal with the elements of unconscionability as a matter of public policy at stage two of the Pompey test.
He goes on to conclude that, in the absence of legislative direction the judicial policymaking means that the majority relies on in Facebook is doing “more harm than good by rendering contract law doctrine more unsettled and more piecemeal, less coherent and less just.”
Read the whole thing.