Subscribers in New Jersey signed up for Microsoft's online service, the Microsoft Network (MSN). During installation or enrollment, MSN displayed a "Member Agreement" in a scrollable on-screen window. Users could proceed only by affirmatively clicking an "I agree" button; clicking "I don't agree" aborted the sign-up. The Member Agreement contained, among other provisions, a forum-selection clause designating the state or federal courts in King County, Washington, as the exclusive jurisdiction and venue for disputes. After experiencing service interruptions and related issues, several New Jersey subscribers (including Caspi) filed suit in New Jersey asserting breach of contract and statutory consumer claims arising from MSN's service performance. Microsoft moved to dismiss based on the forum-selection clause. The trial court enforced the clause and dismissed the action without prejudice to refiling in Washington. On appeal, plaintiffs argued the clause was unenforceable because the agreement was a contract of adhesion, the terms were embedded in a scroll box such that users might not have read them, the clause contravened New Jersey public policy (including the state's consumer protection statutes), and enforcement would be unfair and inconvenient.
Is a forum-selection clause contained in an online clickwrap Member Agreement—assented to by clicking "I agree" after being presented with the terms in a scrollable window—enforceable against subscribers, thereby requiring dismissal of their New Jersey action in favor of the designated Washington forum?
Forum-selection clauses are presumptively valid and will be enforced unless the resisting party shows enforcement would be unreasonable under the circumstances—such as where the clause is the product of fraud or overreaching, where enforcement would violate a strong public policy of the forum, or where the chosen forum is so seriously inconvenient that the party would effectively be deprived of a day in court. Standard-form adhesion contracts are enforceable unless shown to be unconscionable or contrary to public policy; failure to read terms does not defeat assent where the terms were reasonably communicated and the user manifested agreement.
The forum-selection clause in MSN's clickwrap Member Agreement is enforceable. The New Jersey action was properly dismissed so that any dispute would be brought exclusively in the state or federal courts of King County, Washington.
The court began from the presumption that forum-selection clauses are valid and should be honored absent a strong showing of unreasonableness. Plaintiffs failed to demonstrate fraud, overreaching, or circumstances that would render litigation in Washington so gravely difficult as to deny them a day in court. Washington was not an alien or inaccessible forum, and mere inconvenience or additional expense does not suffice to invalidate such a clause. On assent, the court found the presentation and acceptance mechanism adequate. The Member Agreement was displayed in a scrollable window prior to access to the service; users affirmatively clicked "I agree" to proceed. That the forum-selection clause appeared within the scrollable text did not undermine notice or assent, particularly because users could refuse and exit by clicking "I don't agree." The law does not permit a party to avoid a contract simply by asserting that they did not read terms that were reasonably available before acceptance. Regarding adhesion and unconscionability, the court acknowledged the form nature of the contract but found no substantive unfairness in designating Microsoft's home forum. The forum-selection clause did not waive substantive rights or remedies; it merely chose the place for litigation. Plaintiffs identified no strong New Jersey public policy that would be contravened by allowing a Washington court to hear their claims, including statutory consumer claims. Nor did they show that a Washington court could not or would not apply appropriate substantive law where required. In sum, the clause was neither procedurally nor substantively unconscionable, and plaintiffs failed to carry their burden to overcome the clause's presumptive enforceability.
Caspi is a touchstone for the enforceability of online clickwrap agreements and forum-selection clauses. It teaches that clear, reasonably presented click-to-accept terms will bind consumers, even in adhesion settings, and that forum-selection provisions will be enforced absent a concrete showing of fraud, overreaching, strong countervailing public policy, or truly grave inconvenience. For law students, the case illustrates how traditional contract and civil procedure doctrines—assent, adhesion, unconscionability, and forum-selection enforcement—operate in the digital marketplace and informs best practices for drafting and presenting online terms.
Caspi v. Microsoft confirms that clickwrap agreements—where terms are presented and users affirmatively click to accept—create binding obligations, including forum-selection clauses. Under the prevailing Bremen standard, such clauses are presumptively valid absent a strong showing of fraud, overreaching, violation of public policy, or truly grave inconvenience.