The content of this article is intended to be informational only. We caution you against using or relying upon any information contained in this article without first seeking legal advice regarding your particular matter. All matters arising from the use of our website, including this article, shall be governed by Alberta law and shall be within the exclusive jurisdiction of the courts of Alberta.

Many businesses now have websites. A website, by its nature, has a presence that transcends a multitude of legal jurisdictions. By simply having a website, could you be subject to the jurisdiction of a foreign Court?

Let’s take an example. You have a website that has an e-commerce component. Your business is located in Alberta, Canada. A consumer purchases software from you directly over the web. The consumer is a resident of Texas. He found your site using a search engine. He sees the software advertised on your site. He submits an order and pays for the order using your site’s order form and payment facility. The software is downloaded from your site to the consumer in Texas automatically and without human intervention. The software is defective and causes the consumer harm. Can the consumer sue you in Texas, have Texas law apply and ultimately enforce a Texas judgment against you in Alberta?

Let’s take a second example. You provide information on your website. You are located in Alberta, Canada. Someone in Texas reads the information on your website and relies on that information. It turns out the information was inaccurate. The Texan suffers harm as a result of relying on the information that was posted on your website. Can the Texan sue you in Texas, have Texas law apply and ultimately enforce a Texas judgment against you in Alberta?

In both of these examples you could be liable!

Recent Canadian and US cases are setting out guidelines for determining jurisdiction where the internet is concerned. At one end of the spectrum, where a party actively and intentionally conducts business through a website over the internet with foreign residents, the party will be subject to suit in that jurisdiction (absent agreement to the contrary). On the other end of the spectrum, where a party only passively posts information on its website, with no intended commercial activity associated with this posting, and a foreign resident seeks out, finds and makes use of that information, it is unlikely that the party will be found to be subject to suit in the foreign jurisdiction.

Between these 2 ends of the spectrum, a foreign court may assume jurisdiction over a particular transaction and you may, even if you do not defend the lawsuit, be liable for any foreign judgment that is rendered.

There are ways in which you may protect yourself from the possibility of being subject to a foreign court’s jurisdiction. Generally speaking, by contract you can agree on the law that applies and the Court that will have exclusive jurisdiction over a transaction. Such an agreement is your best protection.

We would be happy to advise you regarding ways that you may protect yourself against becoming subject to the jurisdiction of a foreign court.