From eBay to Amazon, more and more purchases happen online. You can buy running shoes, a car, even a house, from the comfort of your home while sitting in front of a computer. Geographic distances between the buyer and seller that used to be insurmountable are now, in many instances, obsolete.
But those same geographic distances can have major consequences when those purchases go bad. There’s nothing new about sales occasionally ending in a legal dispute – after all, that is the basis for various consumer protection laws. If the car dealership down the street sells you a lemon, you can sue the dealership in the nearest courthouse. But what if you bought the car online from a dealer in Texas?
Several recent cases have held that an online seller is not automatically subject to jurisdiction in the buyer’s home state. Whether through Amazon or eBay, merely filling an order does not automatically confer jurisdiction. So, if an online seller – located in Texas – cheats an Oregon buyer, that buyer may have to go to Texas to bring a lawsuit.
There are exceptions – for example, if a seller has a presence in the buyer’s home state, independent of their internet business, they might be subject to jurisdiction there. But that should not be assumed. And if the sale contract has a “forum selection clause” – a contract provision specifying which state claims have to be filed in – that clause is very likely enforceable.
The upshot is that internet sales often come with a hidden limitation on remedies. The convenience of buying over your computer may make it harder to exercise judicial remedies if something goes wrong with the purchase. As usual, buyers beware.