Business-to-business operations are going digital, from eCommerce and e-procurement to digital invoicing, electronic payments and Web-based communication to interact with business buyers and sellers.
But this digitization of the way B2B operates can create complicated and often unprecedented challenges, some of which are landing in the hands of courts to decide. Most recently, the European Court of Justice issued a ruling last week on a dispute stemming from digital contracts between corporate suppliers and procurers.
At the heart of the matter are so-called “click-wrap” contracts, which are digital contracts that include hyperlinks to additional terms and conditions. While EU rules say that B2B contractual disputes must be handled in local courts, there is widespread confusion over whether the hyperlinks in digital contracts constitute “communication,” and therefore the “writing” necessary for an electronic contract to be valid and apply for the choice-of-forum rules that allow plaintiffs to sue in the venue of their choice.
The claimant in the case that went before the EU Court of Justice argued that the terms and conditions should have been at least automatically displayed before an order was placed, and not merely included within a hyperlink.
The CJEU concluded that these hyperlinks are valid and B2B companies can sue defendants in a contractual dispute in local courts rather in defendants’ local courts, according to reports.
To reach this conclusion, the court found that requirements of the choice-of-forum rules are met if it is possible to print out the online contract, and that a hyperlink to this printable version is sufficient.
Reports note that the ruling applies for B2B disputes only, not B2C ones.
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