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Law to Prohibit Non-Disparagement Clauses

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Law to Prohibit Non-Disparagement Clauses

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Ossian Law P.C.

IT Law Alert September 16, 2014

Law To Prohibit Non-Disparagement Clauses: As the popularity of online review sites like Yelp and Trip Advisor continues to grow, businesses look for ways to manage negative consumer feedback. Some sellers have included a waiver clause in their online terms of use whereby the consumer agrees not to make any statement regarding the products or services or the employees of the business.

A new California law is the first to ban such clauses in any contract for the sale or lease of consumer goods or services. The law states that such clauses are “contrary to public policy, and is void and unenforceable”. Violation of the law could result in civil penalties from $2,500 to $10,000. The law also provides consumers with a private right of action to sue for statutory violations.

The new law takes effect on January 1, 2015. See the text of the law here.

Contact us at Ossian Law P.C. regarding social media law or any other information technology law question.

 © 2014 Ossian Law P.C.
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