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Signed into law yesterday by Governor Jerry Brown, California Civil Code Section 1670.8 now provides 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.
This statute comes with a fine of up to $2,500 for the first violation, up to $5,000 for the second and subsequent violations, as well as up to $10,000 for a willful, intentional, or reckless violation.
Software product EULAs are sometimes used to forbid negative reviews, and while this is not mentioned specifically in the text of the law, it is a fairly reasonable argument to think that this provision will apply there as well as in places like Yelp.com.
This law only applies in California, not in other states, or in other nations. Even so, it is a step in the right direction.
(Score: 2) by gman003 on Monday May 11 2015, @02:53PM
It's good that there's an actual penalty for this, rather than just making such clauses unenforceable. Keeps people from putting it in there anyways, knowing that most people aren't going to know that it can't be enforced.
But those penalties better be per-instance, not just per-contract. By which I mean if they make 100 sales with a term like that in the contract, it better be a total fine of $250,000, not $2,500. The latter is chump change to anyone big enough to care enough to put a clause like that in their contract. It needs to scale with how many people are being affected by the bullshit contract. The law unfortunately isn't explicit on that matter, and probably relies on a definition of "contract" that I, as a non-lawyer, am not familiar with.