Court of Appeal Upholds Facebook, Inc.’s Forum Selection Clause

Aird & Berlis successfully represented Facebook, Inc. (“Facebook”) as respondent in Loan Away Inc. v. Facebook Canada Ltd., 2021 ONCA 432, upholding the application of a forum selection clause among commercial parties.

Loan Away, a commercial online lender doing business across Canada, derived a large part of its business from advertising on Facebook’s online social network. Loan Away brought an application before the Ontario Superior Court seeking injunctive relief and a damages reference as against the respondent, Facebook, for having allegedly suspended Loan Away’s advertising campaign. The motion judge stayed the application because a forum selection clause in Facebook’s Terms of Service provided that any disputes must be resolved exclusively before the California courts under California law. Loan Away appealed.

The Ontario Court of Appeal dismissed Loan Away’s appeal, finding that the motion judge’s conclusion that Loan Away had not shown strong cause not to enforce the contractual forum selection clause was “unassailable.”

This decision represents the first consideration by a Canadian court of Facebook’s forum selection clause as applied to a commercial party. It underscores that commercial parties will be held to the terms of their agreement, absent evidence of strong cause to do otherwise.

Aird & Berlis acted for Facebook (now known as Meta Platforms, Inc.) at first instance and on appeal, with a team including Miranda Spence, Ian Aversa and Mark van Zandvoort.