European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

In order to be valid, the clause conferring jurisdiction must be the result of a clear and precise consensus between the parties, in compliance with the forms described in Article 25 of the regulation . According to that article, a clause conferring jurisdiction may be: “a) in writing or evidenced in writing; or b) in a form which accords with practices which the parties have established between t …

Formal requirements

In order to be valid, the clause conferring jurisdiction must be the result of a clear and precise consensus between the parties, in compliance with the forms described in Article 25 of the regulation . According to that article, a clause conferring jurisdiction may be: “a) in writing or evidenced in writing; or b) in a form which accords with practices which the parties have established between themselves; or c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned”. Article 25 assimilates writing to “any communication by electronic means which provides a durable record of the agreement”. The Court of Justice has thus held that the validity of a jurisdiction clause in general terms and conditions of a contract for sale concluded electronically is not affected by the  “click-wrapping” method of acceptance of those terms insofar as that method makes it possible to print and save the text of those terms and conditions before the conclusion of the contract, even if the webpage containing that information does not open automatically on registration on the website and during each purchase .

The formal requirements laid down in Article 25 are intended to ensure legal certainty and that the parties have given their consent . They “were inserted out of the concern not to impede commercial practice, yet at the same time to cancel out the effects of clauses in contracts which might go unread, such as clauses in printed forms for business correspondence or in invoices, if they were not agreed to by the party against whom they operate” . They are strictly interpreted  and are only imposed on the parties to the contract: a third party who benefits from a clause conferring jurisdiction made for his benefit cannot be required to expressly sign the clause so as to rely upon it . The conditions of application of that provision are to be interpreted “in the light of the effect of the conferment of jurisdiction by consent” . The Member States are not authorized to lay down formal requirements other than those contained in Article 25 of the regulation which is intended to lay down itself the formal requirements which clauses conferring jurisdiction must meet . Accordingly, national law cannot object to the validity of an agreement solely on the ground that the language used is not that prescribed by that law . Article 25(5) provides that “an agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract”.

Under Article 25(1), the clause conferring jurisdiction may be in writing or evidenced in writing . The written requirement may be materialized by an agreement which is specially drawn up and signed by the parties for that purpose only, or by a clause included in a contract which has another main subject-matter. In any events, it must be established with certainty that the parties have actually consented to a clause which derogates from the ordinary jurisdiction rules laid down in the regulation . Difficulties may arise when the clause is included in a document which is distinct from the contract signed by the parties. The written requirement is met where the clause conferring jurisdiction is contained in the by-laws of a company which are lodged in a place to which the shareholder may have access or are contained in a public register, and any shareholder is deemed to be aware of that clause . Where the clause is included among the general conditions of sale of one of the parties, printed on the back of a contract, the requirement of a writing is fulfilled only if the contract signed by both parties contains an express reference to those general conditions . This is not the case for the mere printing of a jurisdiction clause on the reverse of a bill of lading . Where a jurisdiction clause is included in a prospectus concerning the issue of bonds, the “in writing” requirement is met only if the contract signed by the parties upon the issue of the bonds on the primary market expressly mentions the acceptance of that clause or contains an express reference to that prospectus .

A clause conferring jurisdiction included in an oral agreement  must specifically relate to the conferment of jurisdiction  and be confirmed in writing. Without a written agreement, a jurisdiction clause does not satisfy the formal requirements of Article 25 ensuring that consensus between the parties has been reached, especially where the general terms containing the clause concerned were mentioned only in the invoices issued by one of the parties . After having required a written confirmation by both parties , which virtually amounted to require a written form, the Court of Justice has reverted to a more liberal interpretation of the provision . Now, the written confirmation may come from either of the parties , provided that it is received by the other party and that the latter raised no objection . 

The San Sebastian Convention has given the parties the possibility to provide for a clause conferring jurisdiction “in a form which accords with practices which the parties have established between themselves”. This provision originates in the Segoura judgment  according to which a confirmation in writing issued unilaterally by the vendor in the case of an orally concluded sale contract, is not sufficient to constitute an agreement on the effect of a jurisdiction clause appearing in its general conditions, unless the oral agreement comes within the framework of a continuing trading relationship between the parties which is based on the general conditions of the party having given confirmation.

Lastly, Article 25 gives the possibility to the parties to carry out a prorogation by contract in a form which accords with a usage in international trade or commerce. Consensus on the part of the parties as to a jurisdiction clause is presumed to exist where their conduct is consistent with commercial practices in the relevant branch of international trade or commerce in which they operate and of which the parties are or ought to have been aware . According to the European Court of Justice, “[t]here is a practice in the branch of trade or commerce in question in particular where a particular course of conduct is generally and regularly followed by operators in that branch when concluding contracts of a particular type” . It is for the national court to determine whether the contract in question comes under the head of international trade or commerce and to find whether there was a practice in the branch of international trade or commerce in which the parties are operating and whether they were aware or are presumed to have been aware of that practice . Awareness of a usage, which is assessed with respect to the parties regardless of their nationality, is established when “in the branch of trade or commerce in which the parties operate a particular course of conduct is generally and regularly followed in the conclusion of a particular type of contracts, so that it may be regarded as an established usage” . As part of an orally concluded contract, the fact that one of the parties did not react or remained silent in the face of a commercial letter of confirmation from the other party containing a pre-printed reference to the courts having jurisdiction and that one of the parties repeatedly paid without objection invoices issued by the other party containing a similar reference suggest that a clause conferring jurisdiction has been validly concluded by the parties, if such conduct is consistent with a practice in force in the area of international trade or commerce in which the parties are operating and the parties are or ought to have been aware of that practice . 

See Case 24/76 Estasis Salotti v Ruewa [1976] ECR 1831, LawLex200900001700JBJ. 

Case C-322/14 Jaouad El Majdoub, Judgment of 21 May 2015, LawLex201500000649JBJ.

Case 71/83 Tilly Russ v Nova [1984] ECR 2417, LawLex200900002207JBJ.

Case C-214/89 Powell Duffryn v Petereit [1992] ECR I-1745, LawLex200900002079JBJ: a company's by-laws being regarded as a contract covering both the relations between the shareholders and also the relations between them and the company they set up, the clause conferring jurisdiction provided for therein, is therefore an agreement, within the meaning of Article 25, which is binding on all the shareholders.

Case 24/76 Estasis Salotti v Ruewa [1976] ECR 1831, LawLex200900001700JBJ. In this case, the Court of Justice has also considered that the same applies where, in the text of the contract, the parties expressly referred to a prior offer which, in turn, expressly referred to general conditions including a clause conferring jurisdiction, provided that the referral is express and can be checked by a party reasonably careful, and where it is established that the general conditions including the clause conferring jurisdiction have in fact been communicated to the other party with the offer to which reference is made. 

Case 71/83 Tilly Russ v Nova [1984] ECR 2417, LawLex200900002207JBJ: where a jurisdiction clause appears in the conditions printed on a bill of lading signed by the carrier, the requirement of an agreement in writing within the meaning of Article 25 of the regulation is satisfied only if the shipper has expressed in writing his consent to the conditions contained in that clause, either in the document itself or in a separate written document. Along the same lines, Case 24/76 Estasis Salotti v Ruewa [1976] ECR 1831, LawLex200900001700JBJ: the mere fact that a clause conferring jurisdiction is printed among the general conditions of one of the parties on the reverse of a contract drawn up on the commercial paper of that party does not satisfy the requirement of a writing laid down in Article 25.

Case C-366/13 Profit Investment SIM SpA, Judgment of 20 April 2016, LawLex201600000854JBJ.

See as example Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ: an oral agreement on the place of performance of contractual obligations which is designed solely to establish that the courts for a particular place have jurisdiction, with no real connection with the contractual obligation, is not governed by Article 7(1), but by Article 25, and must therefore comply with the formal requirements prescribed by the latter as regards jurisdiction clauses.

Case 25/76 Segoura v Bonakdarian [1976] ECR 1851, LawLex200900001735JBJ: The purchaser who agrees to orally abide by the vendor's general conditions, is not to be deemed to have agreed to any clause conferring jurisdiction which might appear in those general conditions, insofar as the fact that one of the parties waives the advantage of the provisions conferring jurisdiction provided for by the regulation cannot be presumed. 

Case C-64/17 Saey Home & Garden NV/SA, Judgment of 8 March 2018, LawLex201800000386JBJ.

Case 25/76 Segoura v Bonakdarian [1976] ECR 1851, LawLex200900001735JBJ: a confirmation in writing of the contract by the vendor, accompanied by the text of his general conditions, is without effect, as regards the clause conferring jurisdiction, unless the purchaser agrees to it in writing, which amounted to require a written document signed by both parties. 

Case 71/83 Tilly Russ v Nova [1984] ECR 2417, LawLex200900002207JBJ: a jurisdiction clause not signed by the carrier and contained in the conditions printed on a bill of lading, satisfies the formal requirements laid down in Article 25 of the regulation where an oral agreement expressly relating to that the clause was expressed by the parties, then confirmed by the carrier who signed the bill of lading. 

Case 150/80 Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671, LawLex200900001569JBJ; Case 221/84 Berghoefer ASA [1985] ECR 2699, LawLex200900001680JBJ.

Case 221/84 Berghoefer ASA [1985] ECR 2699, LawLex200900001680JBJ: the wording of Article 25 does not require that the written confirmation of an oral agreement should be given by the party who is to be affected by the agreement.

Case 221/84 Berghoefer ASA [1985] ECR 2699, LawLex200900001680JBJ. Along the same lines, Case 313/85 Iveco Fiat v Van Hool [1986] ECR 3337, LawLex200900002269JBJ: where a written agreement containing a jurisdiction clause and stipulating that an agreement can be renewed only in writing has expired but has continued to serve as the legal basis for the contractual relations between the parties, the jurisdiction clause satisfies the formal requirements in Article 25 if, under the law applicable, the parties could validly renew the original agreement otherwise than in writing, or if, conversely, one of the parties has confirmed in writing either the jurisdiction clause or the set of terms which has been tacitly renewed and of which the jurisdiction clause forms part, without any objection from the other party to whom such confirmation has been notified.

Case 25/76 Segoura v Bonakdarian [1976] ECR 1851, LawLex200900001735JBJ. See also Case 71/83 Tilly Russ v Nova [1984] ECR 2417, LawLex200900002207JBJ: a jurisdiction clause not signed by the carrier, may satisfy the requirements laid down in Article 25, even in the absence of a prior oral agreement relating to that clause, provided, however, that the bill of lading comes within the framework of a continuing business relationship between the shipper and the carrier, insofar as it is thereby established that that relationship is governed as a whole by general conditions containing the jurisdiction clause and the bills of lading are all issued on pre-printed forms systematically containing such a jurisdiction clause.

Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ; Case C-159/97 Castelletti [1999] ECR I-1597, LawLex200900001569JBJ.

Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ. The existence of a usage in relation to a branch of international trade or commerce, is sufficiently established where a particular course of conduct is generally and regularly followed by operators in the countries which play a prominent role in that branch without it being necessary for such a course of conduct to be established in all the Member States. Moreover, a course of conduct satisfying the conditions indicative of a usage does not cease to be a usage because it is challenged before the courts, provided that it still continues to be generally and regularly followed in the trade with which the type of contract in question is concerned, see Case C-159/97 Castelletti [1999] ECR I-1597, LawLex200900001569JBJ.

Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ.

Case C-159/97 Castelletti [1999] ECR I-1597, LawLex200900001569JBJ. Along the same lines, See Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ: "actual or presumptive awareness of such practice on the part of the parties to a contract is made out where, in particular, they had previously had commercial or trade relations between themselves or with other parties operating in the sector in question or where, in that sector, a particular course of conduct is sufficiently well known because it is generally and regularly followed when a particular type of contract is concluded, with the result that it may be regarded as being a consolidated practice".

Case C-106/95 MSG v Les Gravières Rhénanes [1997] ECR I-911, LawLex200900000336JBJ. 

Case 150/80 Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671, LawLex200900001569JBJ. 

Case 24/76 Estasis Salotti v Ruewa [1976] ECR 1831, LawLex200900001700JBJ.

Case 201/82 Gerling Konzern Speziale Kreditversicherung AG and others v Amministrazione del Tesoro dello Stato [1983] ECR 2503, LawLex200900001653JBJ.

Case 24/76 Estasis Salotti v Ruewa [1976] ECR 1831, LawLex200900001700JBJ; Case 25/76 Segoura v Bonakdarian [1976] ECR 1851, LawLex200900001735JBJ.

Case 150/80 Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671, LawLex200900001569JBJ: pursuant to Article 25 of the regulation, the validity of a jurisdiction clause included in an international commercial agency contract is not subject to the capacity as trader, regardless of the provisions of Article 48 of the French Civil Procedural Code which consider that the clauses provided for non-traders are invalid.

Case 150/80 Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671, LawLex200900001569JBJ; Case C-159/97 Castelletti [1999] ECR I-1597, LawLex200900001569JBJ.

Cass. com., 27 February 1996, Pavan (SA) v Richard (SA); A clause mentioned in illegible characters does not meet the requirements of Article 25 of the regulation.

European Business Law

356. Formal requirements

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Les notions juridiques connexes

356. Formal requirements

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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