1939 Harrison St., Suite 929, Oakland, California 94612

The First Amendment for Customers

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By: Andrew K Jacobson

California Governor Jerry Brown has signed new legislation that voids language in contracts that prevents a consumer from commenting on the performance of a product or service.

New Cal. Civ. Code § 1670.8 states that a“contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.” The hotel in Hudson, New York  that would withhold $500 from deposits for every negative review by someone in a wedding party had best be glad it is not on the Left Coast.

For customers, too.

For customers, too.

Some business may think it would be a good idea to add such a waiver to their terms of use, but not enforce it. However, including an unlawful provision, even without intending to enforce it, can be deemed an unfair business practice barred by Cal. Bus. & Prof. Code § 17200.

Some may worry that this could legalize defamation (which consists of oral slander or recorded libel). It doesn’t. Cal. Civ. Code § 1670.8 only prohibits provisions waiving rights to make statements. Defamatory statements are still prohibited under Cal. Civ. Code §§ 44-48a.

Over three centuries ago, Jonathan Swift said that “falsehood flies, and the truth comes limping after it.” In the social media age, where negative comments can be published immediately to thousands of potential customers, businesses have to resist the temptation to squash the negative comments. The better practice is to show the business is attuned to the criticism, and responds to the reasonable expectation of the customer. Potential customers appreciate businesses that show some flexibility; they don’t appreciate “I’m right, and you’re not.”

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