Governing law for Online Contract

For the determination of the governing law of the contract formed online, parties have to first look at the terms of the contract formed. Parties are generally free to choose the governing law of the contract.

If the contract does not specify any governing law, the law with which the contract has the closest connection applies. Factors including the location of the subject matter, location of the parties or place of execution and place of intended performance of the contract have to be considered for the determination of close connection.

However, certain specific rules may continue to apply regardless of the choice of governing law by the parties. For example, Section 17(2) of the Control of Exemption Clauses Ordinance (Cap. 71) states that the Ordinance would still apply, even if the choice of governing law is not Hong Kong law:

1. the term of the contract appears to the Court or Arbitrator to have been imposed wholly or mainly for the purpose of enabling the party imposing it to evade the operation of this Ordinance; and/or
2. one of the parties to the contract is a consumer, and he was then habitually resident in Hong Kong in the making of contract, and the essential steps necessary for the making of the contract were taken in Hong Kong, whether by him or by others on his behalf.

For the governing jurisdiction of disputes in connection with online contract,parties are also generally free to agree on the  jurisdiction. If no express provision in the contract, a way for the claimant to establish jurisdiction is to prove that the defendant has submitted to the jurisdiction of the Hong Kong court eg by filing defence into Hong Kong court against the claim.

 

 

For legal advice or services on E-Commerce, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public. [Tel: +852 2856 3799   Email: cac@ccsn.hk]

www.ccsn.hk

The above contents do not constitute legal advice and it should not be regarded as a substitute for detailed advice in individual cases. Transmission of this information is not intended to create and receipt does not constitute a lawyer-client relationship between Chow & Cheung and the user or browser. Chow & Cheung is not responsible for any third party content which can be accessed through the website.