Clause forbidding class action enforcibility

Question

I was reading a contract from a particular large merchant service provider, and found an interesting clause in their developer portal terms & conditions which reads as follows :

You agree that you may bring or participate in claims against Moneris in your individual capacity only and not as a plaintiff or class member in any purported class or representative proceeding. Unless you and Moneris agree otherwise, the arbitrator(s) may not consolidate or join the claims of other persons who may be similarly situated, and may not preside over any form of a representative or class proceeding.

Is something like this even enforceable ? I understand you can put lots of stuff into agreements which seem like you are losing your rights, yet are not enforceable. For example a company could put in "You agree that your life is forfeit if you do not pay within 10 business days", while the user agreed to the terms of service, this is clearly illegal to the extent it may negate the legitimacy of the entire legal blah.

Is a clause in someones terms and conditions that explicitly forbids participation in class action suits against the respective company, enforceable ?

Answer 1

Depending on the jurisdiction - yes, this may be enforceable. In most cases, if you have contractually agreed to a proper law for the contract, then that is the law that will apply.

In those cases, if the proper law is California, for example, then that is the legal system that will apply and in these cases, if you attempted to bring or join a class or representative action, the other side could produce this as evidence to support summary dismissal of it.

Answer 2

This clause may be legal in some jurisdictions (e.g. USA) and illegal (and an offense to include) in others (e.g. Australia) on the basis that it purports to exclude the jurisdiction of the courts. Even if the contract contains an agreement that it will be subject to the law of say California this will not help as Australian Consumer Law provides statutory remedies not excludable by contract.

This illustrates the difficulty of trying to write one size fits all terms for an online service where the vendor may not know which laws will apply to a given transaction.