September Edition 2022

44 Many of the online platforms operating in Israel regulate their relationships with their consumers through a user agreement which, in most cases, meets the definition of a "standard contract" under the Israeli law. A standard contract is a contract with a uniform formulation intended for many engagements. Generally, the contract is drafted in advance, by one party in order to be used in agreements with its consumers, while the counterparty, the consumer, can only accept the contract in full or reject it, and has little or no ability to negotiate and change the contract. For the most part, international platforms set in their user agreements foreign choice of law clauses (as well as foreign jurisdiction clauses, which are outside this article’s scope). The Israeli Standard Contracts Law 5743-1982 was enacted to protect consumers party to a standard contract. The Law stipulates that in circumstances where – considering the entirety of the contract’s provisions and the context of the engagement – a specific clause is found to be oppressive or provides an unfair advantage to the service provider, the court is empowered to invalidate it. The Law includes a list of instances which are presumed to be disadvantageous, among them, in the current context, is a clause that denies or restricts the consumer's right to argue certain arguments in court. Therefore, a choice of law clause that restricts the consumer's right to argue certain claims on the basis of Israeli law, can be considered, and has been interpreted, as detailed below, as oppressive and as meeting the presumptions set forth by the law. Hence, in almost all civil claims filed against foreign corporations which include in their user agreement a choice of law clause, including lawsuits alleging a violation of the Consumer Protection Law - it is argued by the plaintiff, that such a clause is an oppressive clause in a standard contract and is therefore void. Caselaw Choice of law clauses were characterized by Israeli courts as carrying unique difficulties in relation to other terms of standard contracts because a consumer whodoes not have expertise,cannot fully understand the meaning or the implications of the choice of 2. 3. 4.

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