Website Terms of Use May Risk Liability Under California Law

Companies selling or leasing consumer goods or services should be alert to a recent rash of lawsuits targeting terms of service provisions.

A recent spate of class action lawsuits brought under California Civil Code section 1670.8 raises the specter of liability for companies whose online terms of use include provisions that plaintiffs allege limit consumer reviews. Although section 1670.8 is not new legislation, it has been seldom litigated since going into effect on January 1, 2015. However, several putative classes of plaintiffs have recently taken aim at so-called “non-disparagement” provisions in the terms of use of retailers’ websites, highlighting a potential concern for any business whose terms of use contain such provisions.

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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.

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