## Facts

- Dell sold computers online under standard-form Terms and Conditions containing an arbitration clause requiring arbitration under National Arbitration Forum rules.
- Due to a pricing error, certain computers were displayed at sharply reduced prices.
- After Dell restricted ordinary access to the erroneous order pages, a Quebec consumer used a direct URL to place an order at the mistaken price; many other Quebec consumers did the same.
- Dell announced it would not honor the erroneous orders.
- A Quebec consumer and a consumer association sought authorization to bring a class action.
- Dell moved to refer the dispute to arbitration based on the arbitration clause.
- The Terms and Conditions were accessible during checkout via a hyperlink; the arbitral rules were accessible through a further hyperlink.

## Issues

1. Whether the court or the arbitrator should decide, at the referral stage, challenges to the validity or applicability of the arbitration clause (competence–competence).
2. Whether Québec’s consumer jurisdiction rule (art. 3149 C.c.Q.) barred enforcement of the arbitration clause as an impermissible waiver of Québec authorities’ jurisdiction.
3. Whether the arbitration clause and incorporated arbitral rules, provided through hyperlinks, were unenforceable as “external clauses” not reasonably accessible (art. 1435 C.c.Q.) and/or as abusive terms in a contract of adhesion.
4. Whether a proposed consumer class action may proceed despite a valid arbitration agreement.

## Decision

- The Supreme Court of Canada allowed Dell’s appeal and referred the parties to arbitration; the class action was stayed.
- The Court held that, as a general rule, arbitrators decide first whether an arbitration agreement is valid and applicable; a court may decide at the outset only where the challenge raises a pure question of law or a mixed question requiring no evidence.
- The Court held that the hyperlink presentation made the arbitration clause (and the incorporated arbitral rules) reasonably accessible and therefore binding, even if characterized as external clauses.
- The Court held that art. 3149 C.c.Q. did not invalidate the arbitration clause on these facts because it was treated as an international jurisdiction rule requiring a sufficient foreign element, which was not established merely by naming a U.S. arbitral administrator.
- The Court rejected the view that arbitration clauses in consumer contracts of adhesion are inherently abusive; abusiveness required proof on the record.

## Legal Principles

- Competence–competence: arbitrators ordinarily have priority to rule on their own jurisdiction, including challenges to the arbitration agreement’s validity or scope; courts intervene at the referral stage only for challenges resolvable as pure law (or mixed fact and law without evidence).
- Electronic contracting: terms made available by hyperlink can be incorporated into an online standard-form contract if reasonably accessible in a manner functionally comparable to access in a paper contract.
- External clauses (C.C.Q. art. 1435): an external term incorporated by reference is enforceable if the adhering party could reasonably access it at contracting; hyperlink access may satisfy this standard.
- Consumer jurisdiction (C.C.Q. art. 3149): construed as an international private law protection that does not automatically negate an arbitration agreement absent a sufficient foreign element.
- Contracts of adhesion and abusive clauses (C.C.Q. arts. 1437–1438): inequality of bargaining power does not by itself negate consent; a clause is not invalid solely because it selects arbitration, and abusiveness must be shown.

## Conclusion

The court enforced an online consumer arbitration clause presented through hyperlinks, held that the arbitrator generally decides first whether the clause is valid and applicable, and stayed a proposed Québec class action in favor of arbitration because the consumer-protection jurisdiction rule was not treated as barring arbitration on these facts.


Dell Computer Corp. v. Union des consommateurs, [2007] 2 S.C.R. 801 (Can. 2007)