Locke Lord Article: Doing Business in New Jersey? Your Website Terms & Conditions May be Plaintiffs’ Next Target

by Locke Lord LLP

Doing business in New Jersey just got thornier. Recent decisions broadly interpreting the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14, et seq., have spawned a flurry of pre-suit notification letters and class action complaints claiming that companies’ website terms and conditions, advertisements, consumer contracts, and other written communications run afoul of the statute. The TCCWNA prohibits sellers from “offer[ing] to any consumer or prospective consumer or enter[ing] into any written consumer contract or giv[ing] or display[ing] any written consumer warranty, notice or sign” that “violates any clearly established legal right of a consumer.” TCCWNA violations entitle plaintiffs to statutory and actual damages, injunctive relief, and attorney’s fees.   

Why Should the TCCWNA Matter to Me Now?
Plaintiffs are seizing on the developing body of TCCWNA case law to attack defendants’ website terms and conditions. See e.g., Russell v. Croscill Home LLC, No. 16-cv-01190 (D.N.J. Mar. 2, 2016) (putative class action alleging defendant’s website terms and conditions violate TCCWNA); Darla Braden v. TTI Floor North Am. Inc. d/b/a Hoover, No. 3:16-cv-00743 (D.N.J. Feb. 10, 2016) (same). In Hoover, for example, plaintiff filed a TCCWNA class action complaint on behalf of herself and “all persons in the State of New Jersey who purchased products from …hoover.com, for personal use”. Hoover Compl. ¶ 44. The complaint alleges that Hoover’s “website contains a consumer contract (entitled ‘Terms & Conditions’) that purports to impose illegal exculpatory and other such provisions upon all purchasers of goods or services from that website and purports to nullify certain legal duties and responsibilities Hoover owes its consumers.” Id. ¶ 1. Plaintiff argues that the website’s Terms & Conditions purport to: (1) protect Hoover from liability for tortious acts and for manufacturing or selling dangerous products; (2) prohibit customers from seeking redress for injuries that were caused by unsafe products; and (3) absolve Hoover of any liability arising from third-party criminal acts. Id. ¶¶ 14-17.   

The Hoover and Croscill cases are emblematic of plaintiffs’ attempts to stretch TCCWNA liability and apply it in the digital age, particularly where the sheer volume of internet activity and website analytics make “numerosity” an easy prong to satisfy in the class certification analysis. Any entity doing business in New Jersey, even if only through its website, must be mindful of the TCCWNA and recent case law interpreting it when drafting and modifying its consumer-facing communications.

What Constitutes a Violation of the TCCWNA?
The TCCWNA “prohibits a seller from entering into a contract with a consumer that includes any provision that violates a federal or state law.” Manahawkin Convalescent v. O’Neill, 85 A.3d 947, 962-63 (N.J. 2014) (emphasis added). The statute defines “consumer” as “any individual who buys . . . any . . . property . . . which is primarily for personal, family or household purposes.” N.J.S.A. § 56:12-15. Any entity that is involved in the production of a consumer good, or is part of the chain of distribution, advertising, or sale of the consumer good may constitute a “seller” under the TCCWNA if it can be said that the business “was not a stranger” to the transaction, “lent its assistance to the transaction,” or “obtained a benefit from the transaction.” Smith v. Vanguard Dealer Servs., L.L.C., No. A-3875-09T2, 2010 WL 5376316, at *3 (N.J. Super. Ct. App. Div. Dec. 21, 2010).   

The New Jersey Supreme Court and federal courts applying New Jersey law have made clear that the TCCWNA’s applications are far reaching—from traditional consumer contracts, to terms and conditions on gift certificates, and even to representations made on restaurant menus. See e.g., Shelton v. Restaurant.com, Inc., 214 N.J. 419, 442-443 (N.J. 2013) (concluding that the “TCCWNA is a remedial statute, entitled to a broad interpretation” for the purpose of permitting “consumers to know the full terms and conditions of the offer made to them by a seller or of the consumer contract into which they decide to enter”). Importantly, under the TCCWNA, courts have found that a seller can be liable to a customer, or even a prospective customer, who has no actual damages. See e.g., Johnson v. Wynn’s Extended Care, Inc., No. 12-cv-0079, 2012 WL 5880310, at *4 (D.N.J. Nov. 20, 2012). A seller who violates the TCCWNA is liable for statutory damages of not less than $100.00 for each separate violation of the statute or for actual damages, or both at the election of the consumer, together with reasonable attorney’s fees and court costs. See N.J.S.A. § 56:12-17. A consumer “also shall have the right to petition the court to terminate a contract which violates the provisions of…this act and the court in its discretion may void the contract.” Id.

In recent years, plaintiffs have alleged violations of the TCCWNA based on exculpatory provisions seeking to limit sellers’ liability, provisions purporting to waive attorney’s fees and shift costs, and provisions mandating that consumers waive the right to sue and submit to arbitration. By way of example, in Martinez-Santiago v. Pub. Storage, 38 F. Supp. 3d 500, 514 (D.N.J. 2014), the class representative plaintiff alleged that the exculpatory and indemnification provisions in the defendant’s standard form contract for the lease of personal storage space violated the TCCWNA because they purported to disclaim liability for personal injuries occurring on the defendant’s property. In denying defendant’s motion to dismiss and subsequently certifying the class, the court found that the class representative adequately stated a violation of a clearly established right—at the time plaintiff signed her agreement with defendant, it was clearly established “under the common law,” that defendant “has a duty to guard against any known dangerous conditions on its property or conditions that should have been discovered” and that “enforcing the exculpatory provision would give [defendant] permission to be careless—negligent, reckless—in the maintenance of its property.” Martinez-Santiago, 38 F. Supp. 3d at 514.

Similarly, the Third Circuit has held that a class representative plaintiff’s TCCWNA claim was sufficient to survive a motion to dismiss where the plaintiff alleged that a provision of defendant’s service contract required that consumers waive attorney’s fees and split costs. See Johnson v. Wynn’s Extended Care, Inc., No. 15-cv-1343, 2015 WL 8781374, at *1 (3d Cir. Dec. 15, 2015). In Johnson, the court explained that the district court’s dismissal of the claim was improper since “the New Jersey Supreme Court has clearly held that clauses preventing the recovery of attorney’s fees and costs, when mandated by statute, are unconscionable.” Id. at *2.   

New Jersey courts also have addressed the intersection of arbitration provisions and the TCCWNA. In Atalese v. U.S. Legal Servs. Grp., L.P., 99 A.3d 306, 311 (N.J. 2014), cert. denied, 135 S. Ct. 2804 (2015), plaintiffs alleged that defendant’s arbitration provision in its debt-adjustment service contract violated the TCCWNA because it did “not clearly and unequivocally state its purpose in depriving [plaintiff] of her time-honored right to sue”. The trial court dismissed the complaint and enforced the arbitration provision and the Appellate Division affirmed. On appeal, the New Jersey Supreme Court reversed. Although the court recognized the deep body of law and policies favoring arbitration pursuant to the Federal Arbitration Act and identical New Jersey Arbitration Act, the court reasoned that “arbitration’s favored status does not mean that every arbitration clause, however phrased, will be enforceable.” Atalese, 99 A.3d at 312. In examining the language of the particular arbitration clause at issue in Atalese, the court explained that the absence of “clear and unambiguous language that the plaintiff is waiving her right to sue or go to court to secure relief” rendered the arbitration agreement unenforceable, potentially giving rise to a TCCWNA claim. Id. at 315-316.   

What Can You Do to Shield Your Business from Liability under the TCCWNA?
Companies doing business in New Jersey must draft and review their terms and conditions, social media presence, form contracts, and other consumer-facing communications with New Jersey law in mind. In particular, exculpatory provisions seeking to limit sellers’ liability, provisions purporting to waive attorney’s fees and shift costs, and provisions mandating that consumers submit to arbitration should be carefully reviewed and modified to the extent they compel consumers to waive or limit certain rights in violation of New Jersey law. The best defense to TCCWNA claims is to ensure that your company’s terms and conditions and other consumer-facing communications are up-to-date and consistent with recent case law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Locke Lord LLP | Attorney Advertising

Written by:

Locke Lord LLP

Locke Lord LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.