In this age of internet trolls, Yelp, Facebook, and Google reviews, businesses may be tempted to consider requiring customers to sign non-disparagement clauses in standard contracts so as to prevent harm to their commercial reputation from negative on-line posts and reviews. This practice was increasingly common up through 2016. That year, however, Congress passed and President Obama signed, a law preventing the use of consumer contracts that prevent customers from posting negative reviews. This little-known law, the Consumer Review Protection Act, 15 U.S.C. Section 45b, (“CRPA”) went into full effect as of December 14, 2017.
The CRPA states that any provision of a “form contract” that prohibits or restricts the ability of an individual to communicate a “written, oral, or pictorial review, performance assessment of, or other similar analysis of, including by electronic means, the goods, services, or conduct” of a business, or imposes a penalty or fee against a party for engaging such a communication, is void from the inception. A “form contract” is a contract with standardized terms used by a person or business in the course of selling or leasing goods or services if it is imposed on an individual without a meaningful opportunity to negotiate the terms.
The Act contains a number of important exceptions. Among other things, it does not apply to employment agreements or independent contactor agreements. It does not apply to the right to protect or remove trade secrets or confidential commercial or financial information. It does not affect any common law cause of action for defamation, libel, or slander.
The Federal Trade Commission and state attorneys general have authority to enforce the CRPA.