Online reviews are becoming a common way for people to determine whether or not to use a particular business, company, or product. Yelp, Google Reviews, Angie’s List, and Amazon all have a “Customer Reviews” section that allows people to read other people’s opinions on a particular product or company. People submitting online reviews are providing a valuable service. The problem?
Some companies have “negative review clauses” in their default contracts that people must sign before doing business with them.
These clauses allow the business to fine a customer up to thousands of dollars for posting a negative review about their business. Here is an example from a story Yahoo! News did on the company KlearGear.com that had a negative review contract provision. The provision stated:
"In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts kleargear.com, its reputation, products, services, management or employees."
The Yahoo story continued to tell the story of a woman who was fined $3,500 and reported to credit agencies for posting a negative review of the business KlearGear.com on Yelp. These contract provisions should be unenforceable and illegal.
There is a Senate bill currently being considered that would outlaw the practice of placing these types of clauses in contracts. The bill has bipartisan support and should be passed. However, until there is federal law protection, you should be cognizant of what you are signing and agreeing to.
Be wary about writing a negative review of a business before reviewing anything you have agreed to with them.
Reputable, well-known businesses are not likely to engage in this bad faith practice. But if you are dealing with a lesser-known business, save yourself a headache and potentially a large sum of money by making sure they are not including one of these egregious provisions in any contract you have agreed to.