Use Caution When Prohibiting Negative Reviews

As a business owner, we all must now deal with potential online negative reviews. The question is not if you will get a negative review, the question is when. What is frustrating to a business is often the negative review comes after providing high quality service or product, but the customer or client disagrees and may not understand. It is tempting to considering writing into your contract prohibitions against negative reviews or mandatory liquidated damages should a customer write a negative review. Especially in industries such as medicine and legal where ethics and laws may prohibit responding to a negative review.

The problem with prohibiting a negative review is you can be accused of deceptive trade practices, violation of consumer protection laws, restraint on trade, and potentially other civil (and possible criminal) ramifications. The US Federal Trade Commission has begun this attack by filing a Motion for Restraining Order against Roca Labs who sells a non-surgical gastric bypass product. When you purchase the product, you have two options: 1) pay three times as much and have the right to post as many negative reviews as you like; or 2) pay 1/3 of the price and agree to never post a negative review or tell any potential customer that the product did not work or made you sick. If you elected option 2, you could be facing a breach of contract penalty of $100,000.00.

Companies need to be careful and should consult with a business lawyer in Anne Arundel County that understands the changing landscape of the business world. There are steps to help receive positive reviews and steps to minimize negative reviews. Before responding to a negative review, companies need to understand what can and cannot be disclosed. Before writing a contract that prohibits negative reviews, a business should consult with a lawyer who can provide advice on whether to include a provision and if so help narrowly draft a position to prevent it from being sued by a government agency or private party.
Categories: Business Law