In a recent decision in case no. 4A_507/2021 (in Italian), the Swiss Federal Supreme Court (SFSC) set out the requirements for a valid conclusion of a choice of forum agreement in the context of General Terms and Conditions (GTCs). In the following, we will (1) briefly set out the general legal framework for GTCs in Switzerland, (2) present the recent decision of the SFSC, and (3) highlight the lessons from this decision.
1. General legal framework for GTCs in Switzerland
In Switzerland, GTCs of one of the parties may become an integral part of a contract if accepted expressly (in writing or orally) or implicitly (tacitly) by the other party. Implied incorporation of GTCs is primarily accepted in ongoing business relationships, e.g. if similar contracts have already been concluded in the past, in which the GTCs of one party were included.
When a party is inexperienced in business, a sufficiently clear reference to the GTCs is required. The party accepting the GTCs of the other party must have had the opportunity to take note of the content of the GTCs in a reasonable manner. The text of the GTCs must therefore be easily available to the accepting party for downloading, saving and printing before the conclusion of the contract. However, it is not necessary that the accepting party actually takes note of the GTCs prior to concluding the contract. In general, the same principles apply to electronic and conventional business transactions.
Even if the GTCs have become an integral part of a contract according to the above principles, not all provisions of the GTCs may actually be enforceable against the accepting party. The so-called rule of unusualness provides that unusual (surprising or non-business-related) clauses do not become an integral part of the contract if the accepting party did not read, did not take note of, or did not understand the implications of the GTC prior to concluding the contract (so-called global adoption).
2. Recent decision of the SFSC on choice of forum clauses in GTCs
Pursuant to Article 17(2) of the Swiss Civil Procedure Code (CPC) and Article 5(1) of the Swiss Private International Law Act (PILA), a choice of forum agreement must be concluded in writing or in any other form allowing it to be evidenced by text. In a recent decision in case no. 4A_507/2021 (in Italian) published on 6 June 2022, the SFSC confirmed its case law, according to which a choice of forum agreement does not have to be signed but can also be concluded in an exchange of letters. However, the agreement must be concluded expressly, i.e., there must be express written consent to a choice of forum clause, irrespective of the medium used.
A contract of carriage was concluded between two Swiss companies via email. At the end of each email sent by the carrier, i.e., after the signature, the following was written in small letters, in German and English:
“We work exclusively according to the General Terms and Conditions of the Swiss Freight Forwarders and Logistics Association (GC SPEDLOGSWISS), most recent edition – Jurisdiction is Bülach. This E‑mail and any attachments contain confidential and/or privileged information. Only the intended recipient may read, copy or use it. If you are not the intended recipient or have received this E‑mail in error, please notify the sender immediately and delete this E‑mail and any attachments from your system. Thank you.”
When the consignor sued the carrier in Lugano, the latter invoked the lack of territorial jurisdiction, referring to the choice of forum agreement concluded on the basis of the emails. When the carrier did not succeed with this argument before the cantonal courts, which affirmed their jurisdiction, it lodged a complaint with the SFSC. In its appeal, the carrier argued that a valid choice of forum agreement was concluded, since, in line with the SFSC’s practice with regard to GTCs and in the context of business relationships, no explicit consent was required; but, absent any opposition from the accepting party, it was sufficient to send a text or an invoice on which a choice of forum agreement was clearly and unambiguously indicated.
The decision of the SFSC
The SFSC recalled that pursuant to its standing case law, the formal requirements for a valid choice of forum agreement must be strictly applied because such agreement deviates from the general principle of the forum at the place of the defendant. The formal requirements aim to prevent a choice of forum clause from being inserted into the text of a contract without the knowledge of the parties. For one of the parties to be able to enforce such a clause, it is therefore necessary that the parties have actually agreed to choose the forum and, cumulatively, that their common will has been expressed in one of the forms mentioned by the law.
The SFSC also confirmed its case law that a choice of forum agreement does not need not be signed, but may result from an exchange of letters. However, the willingness to accept a clause that the other party proposes in writing must be expressed clearly and also in writing; the means of communication used is irrelevant. Silence on the part of one of the contracting parties does not guarantee conscious acceptance; therefore, a choice of forum clause included in a written order confirmation is not considered agreed upon simply because the addressee did not object to it.
The SFSC held that the carrier neither had alleged nor demonstrated an explicit written acceptance by the consignor, such as by fax or email, of the choice of forum agreement in favor of the court of Bülach. Moreover, nothing can be inferred from the silence of the consignor upon receipt of the emails of the carrier proposing the choice of forum. The SFSC noted that the silence of one of the contracting parties to a proposed choice of forum does not imply acceptance; no explicit objection by the consignor was necessary.
The carrier’s proposal for a choice of forum was placed at the end of its email, written in small print just above the warning of the confidential nature of the email, and the carrier never invited the consignor to explicitly accept this proposal for a choice of forum. In the absence of an explicit written acceptance by the consignor, the SFSC held that it cannot be inferred that a valid choice of forum agreement was concluded with the said emails. The SFSC, therefore, dismissed the carrier’s appeal and affirmed the competence of the courts of Lugano. However, the SFSC did not decide on whether the GTCs have in fact been validly included in the contract of carriage, and left this for the cantonal courts to resolve.
3. Lessons to be learnt
This decision of the SFSC shows that to ensure that a choice of forum clause contained in GTCs is enforceable, the following must be considered: The general rules for GTCs do not apply tel quel to choice of forum agreements included in GTCs. Rather, for choice of forum agreements, explicit written consent of the accepting party is required. Tacit acceptance is not possible. Moreover, choice of forum agreements might qualify as “unusual” if contained in GTCs. They should thus be especially highlighted to the accepting party prior to the acceptance of the GTCs. It must also be emphasized that for contracts concluded with consumers, different standards apply. Pursuant to Article 35(1) CPC and Article 114(2) PILA, consumers may not waive in advance jurisdiction at their domicile or habitual residence.