jurisdiction clauses give contracting parties the ability to oust the
jurisdiction of domestic courts and instead entrust current or future contractual
disputes to a foreign authority. Citing their unusual and distinctive nature,
Justice Derek Guthrie of the Quebec Superior Court, speaking in Classé Audio
inc. v. Linn Products Ltd., 
Q.J. No. 432 ("Classé Audio") has expressly queried whether such
clauses should be subject to the same presumptions of tacit acceptance that
have traditionally been applied by Quebec courts to more commonplace contractual
terms and conditions.
that ousted the jurisdiction of Quebec courts were illegal prior to the
1994 enactment of Article 3148 (par. 2) of the Civil Code of Quebec, which
reads as follows:
"A Quebec authority has no jurisdiction where the parties, by
agreement, have chosen to submit all existing or future disputes between
themselves relating to a specified legal relationship to a foreign authority".
in GreCon Dimter Inc. v. J.R. Normand Inc.  S.C.J. No. 46, the Supreme Court of Canada noted that while
great deference must be given to exclusive jurisdiction clauses they are
nonetheless subject to the following limits: a) they cannot oust a Quebec
authority from a sphere of jurisdiction that has been exclusively granted
to it (e.g. employment contracts and consumer contracts); b) they must be
mandatory and must clearly and precisely confer exclusive jurisdiction on
the foreign authority, and c) there must be a meeting of minds between the
parties, otherwise the clause is invalid.
last two limits on party autonomy were considered in Classé Audio. In this case, the plaintiff, a Quebec manufacturer
of audio equipment, issued purchase orders for, and took delivery of, 230
audio disk engines made by the defendant, a Scottish manufacturer of audio
components, between March 2003 and May 2004.
plaintiff's purchase order forms contained the following terms and conditions:
"I. INVOICES must bear exact
same prices and terms or authorization for changes must be received from
our company in writing, prior to shipping. [...]
5. By acceptance of this purchase
order, or shipment of any part of it will constitute an agreement to all
of its specifications as to terms, delivery and prices„
Upon receipt of the plaintiff's
purchase orders in Scotland, the defendant shipped the disk engines
FOB Scotland, accompanied by the
reverse side of the defendant's invoices contained the following
choice of forum/choice of law clause:
"11. Legal Construction:
(a) The construction, validity or
performance of this contract shall be governed by the Law of Scotland to
the jurisdiction of whose courts the parties agree to submit"
plaintiff was subsequently dissatisfied with the disk engines and sued the
defendant in Quebec Superior Court in 2005. Invoking the jurisdiction clause
contained in its invoices, the defendant filed a motion to have the suit
dismissed for want of jurisdiction.
the motion hearing the plaintiff led the following evidence to establish that
the parties had not agreed to be bound by a jurisdiction clause: a) the
plaintiff's representatives had never discussed forum selection issues
with the defendant's representatives; b) the defendant's jurisdiction clause
was never brought to the plaintiff's attention; c) the plaintiff's representatives
did not look at the reverse side of the defendant's invoices until many months
after all the disk engines had been delivered and d) the plaintiff had never
authorized any changes in the terms of its purchase orders.
response, relying principally upon "custom and usage" case law
generally involving limitation of liability clauses found either in written
agreements signed by both parties or terms and conditions on warehouse
receipts, the defendant argued that since the identical jurisdiction clause was
found in each of the 16 invoices it had submitted to the plaintiff for
other audio products purchased between April 1999 and August 2002, the
plaintiff should be deemed to have agreed to the clause.
Guthrie declined to follow the authorities relied upon by the defendant and
rejected the motion to dismiss.
because forum selection clauses in international commercial transactions
are given special treatment in the Civil Code of Quebec, Justice Guthrie concluded
that they should not be treated in the same manner as other standard types of
clauses often found in purchase orders, warehouse receipts, invoices, etc.
while he recognized that usage can be established by the course of dealings
between two parties, Justice Guthrie limited its application to circumstances
in which the parties have in fact engaged in conduct consistent with the
terms of the clauses they are to be deemed to have knowledge of. For example,
if in their previous dealings the parties in the present case had used the
courts of Scotland to resolve a dispute, then the plaintiff could be deemed to
have accepted such courts as the proper forum for disputes.
Justice Guthrie suggested that "if it were established that in their previous dealings,
the plaintiff and the defendant had implemented any one of the provisions
found on the back of the defendant's invoice form, the defendant might argue
that this conduct implied a tacit agreement by the plaintiff on all of such provisions."
Guthrie found that no proof of such conduct had been presented.
Justice Guthrie also accepted the plaintiff's alternative submission that the
jurisdiction clause failed to satisfy the criteria established in GreCon
Dimter because it was neither
exclusive nor contained mandatory wording. The defendant's motion for permission
to appeal was dismissed on March 23 by Justice André Rochon of the Quebec Court
of Appeal because the issue of tacit consent was "essentially based on
questions of fact and credibility".
Robinson is the senior litigator at Robinson Sheppard Shapiro in Montreal.
He represented the plaintiff before the Quebec Superior Court and the
Quebec Court of Appeal.
Krnjevic is a partner with Robinson Sheppard Shapiro's Insurance Practice
Group. He represented GreCon Dimter before the Supreme Court of Canada.