Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Read Terms of Online Agreement Before Clicking “I Accept”
Author: Dan Brecher
Date: May 20, 2014
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If you routinely agree to the terms and conditions of online agreements without reading them, it is important to understand you could be subjecting yourself to liability. Companies are starting to insert some surprising clauses into these agreements. One current trend is for online companies to include a provision banning consumers from writing bad reviews about them. These are commonly referred to as non-disparagement agreements.
Websites such as Yelp.com or RipOffReport.com have increased in popularity. However, negative reviews can cause companies to lose money. As a result, companies have started taking legal action against consumers who have posted bad reviews about them online.
When you click “I Agree” without reading the language in the contract, you are taking a risk and exposing yourself to legal action. You may be agreeing to surprising terms that you are not even aware of when you violate them. Online reviews and other communications can reach thousands of people and therefore can also have significant legal consequences.
Lawsuits alleging violations of disparagement clauses are increasing in popularity. Reports range from a photographer threatening to sue a bride for $350,000 for posting bad reviews after signing a non-disparagement clause without knowing it to landlords suing a tenant for more than $1 million because of “defamatory” comments made online about his rental experience.
Even though online transactions are often less formal, you should still consider what type of documentation is necessary with the type of business you are conducting. Companies receiving poor reviews can file lawsuits under defamation and libel laws, as well as damage to their reputation, all resulting in a loss of revenue.
No case has made its way through the entire court system yet, but it should be interesting to see the result when one does. When an individual’s constitutional right to free speech infringes on another’s privacy rights, it is usually a matter that must be decided on a case-by-case basis.
If you have any questions about the issues discussed above or would like to discuss other contractual matters, please contact me or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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