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Hoffman v. Supplements Togo Management, LLC

419 N.J. Super. 596, 18 A.3d 210 (App. Div. 2011)

FORUM SELECTION — Although a forum selection clause is generally enforceable, if it is hidden from view on a website and can only be located by following a circuitous path, then it will not be enforced against the consumer.

A consumer sued the seller of a dietary supplement, alleging both statutory and common law fraud, specifically that the seller had made false and exaggerated representations, lacking in scientific or objective support. The consumer purchased the product over the internet. Prior to filing an answer, the seller moved to dismiss the lawsuit, arguing the consumer was precluded from suing in New Jersey based upon a forum selection clause contained within a disclaimer on the seller’s internet website. It said that a lawsuit may only be filed in the state of Nevada. The lower court granted the motion on this ground.

The consumer appealed, and the Appellate Division reversed and remanded, holding that the forum selection clause was presumptively unenforceable. It agreed that, generally, a seller may designate an exclusive forum in a contract. Also, a forum selection clause is generally enforceable where it is not the product of fraud or of undue bargaining power, would not violate public policy, and would not seriously inconvenience the parties at trial. In applying these standards of enforceability, a critical consideration is whether the consumer was provided with fair notice of the clause. Here, it found that the company structured its website in a way that did not give potential purchasers reasonable notice of the forum selection clause. The Court held that the clause was unreasonably masked from the view of a prospective purchaser because of a circuitous mode of presentation. To see the arbitration text, the consumer had to scroll down to a submerged portion of the webpage. The consumer also alleged, unrebutted, that if he added another item to an electronic shopping cart, the webpage would skip ahead to new pages that did not contain the clause.

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