Review Clauses and the Consumer Review Fairness Act

Why this matters

Every few years an owner who has been burned by an unfair review asks the obvious question: can I just put something in my terms so customers cannot do that to me? The answer under federal law is no, and the clause is worse than useless. In a standard customer contract it is void, and offering it is itself a violation the FTC and your state attorney general can act on, whether or not you ever try to enforce it. The shops that get in trouble here rarely wrote the clause. They inherited it in a template and never read it.

What the law voids

The Consumer Review Fairness Act of 2016 (CRFA), 15 USC 45b, makes three kinds of provision void from the start when they appear in a form contract:

• a provision that prohibits or restricts a customer's ability to engage in a covered communication, meaning a written, oral or pictorial review, performance assessment or similar analysis of the business's goods, services or conduct;
• a provision that imposes a penalty or fee on a customer for engaging in one;
• a provision that transfers or requires the customer to transfer intellectual property rights in their review content to the business, except a non-exclusive license to use it.

It then goes a step further: it is unlawful to offer a form contract containing a void provision, or to attempt to enforce one. Offering it is the violation. A clause sitting unenforced in the back of your estimate terms for five years is five years of violations, each one a contract a customer signed.

The Act is enforced by the FTC as a violation of a rule under the FTC Act, and by state attorneys general, who can sue on behalf of their residents.

What a form contract is, and what is outside it

The Act's reach is set by its definition, so the gate matters.

A form contract is one with standardized terms, used by a person in the course of selling or leasing goods or services, and imposed on an individual without a meaningful opportunity to negotiate those terms. Your estimate terms and conditions, a service agreement, a membership plan's terms, the click-through on an online booking page: all form contracts. A customer who signs where the tech points has not negotiated anything.

Outside the definition:

• Employer and contractor agreements. The Act expressly excludes employment and independent contractor contracts, so a confidentiality term in a tech's employment agreement is not a CRFA problem, though other law governs it.
• Contracts actually negotiated. A settlement agreement drafted after a dispute, where the customer has a real chance to change the terms, is not a form contract under the definition. Whether a confidentiality or non-disparagement term in such an agreement holds up is a different question under state law and the FTC's review rule, and one for your attorney. Do not use this as a route to slip a review gag into a "settlement" that is really a standard form handed to every unhappy customer.

What the Act expressly does not stop. The business may still remove or refuse to display content on its own website or platform that contains confidential or personal information (someone's medical details, a phone number), is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or inappropriate with respect to race, gender, sexuality, ethnicity or another intrinsic characteristic, is unrelated to the goods or services, or is clearly false or misleading. That carve-out is about your own site's moderation. It is not permission to contract the customer out of reviewing you elsewhere.

The state layer. Some states got there first and go further. California's Civil Code 1670.8 prohibits a contract or proposed contract for the sale or lease of consumer goods or services from requiring the consumer to waive the right to make any statement about the business, and lets the state and the consumer pursue civil penalties for including or enforcing one. Other states have their own versions; a review gag is also a textbook candidate for a deceptive-practices claim under any state's unfair and deceptive practices act. See related: Unfair and Deceptive Practices Laws Behind Every Complaint.

This is not legal advice. If you find a clause like the ones below in paperwork customers have already signed, talk to your attorney about whether anything beyond removing it is warranted.

What these clauses look like in a shop's paperwork

Owners rarely write "you may not review us." The clauses come in costume:

• The non-disparagement line. "Customer agrees not to make any statement, online or otherwise, that disparages Company, its employees or its work."
• The fee for a bad review. "Any public statement causing harm to Company's reputation will incur an administrative fee" or a "reputation restoration charge."
• The warranty condition. "Warranty is void if Customer posts a negative review before allowing Company 30 days to resolve the issue." Conditioning a warranty on silence is a restriction plus a penalty.
• The ownership grab. "Customer assigns to Company all rights in any review, photograph or comment about Company's services." The Act permits only a non-exclusive license.
• The "contact us first" requirement. "Customer must submit any complaint in writing to Company before posting online." Framed as a requirement, with a consequence, it restricts. Framed as an invitation with no consequence, it does not.

Worked example: the template from the old owner

A painting company changes hands. The new owner keeps the previous owner's estimate and contract template, which runs to two pages of terms. Eight months later, a customer whose interior repaint was finished late posts a one-star review saying the crew left drop cloths and tape behind and the job ran a week over.

The office manager, angry on the crew's behalf, finds this in section 11 of the terms the customer signed:

11. Customer agrees that it will not post, publish
    or cause to be published any negative review,
    comment or rating concerning Company. Any breach
    of this section shall result in a reputation
    fee of 25% of the contract price, payable
    within 10 days of written notice.

She drafts a letter invoking it. The owner, before signing, asks the shop's attorney.

What section 11 actually is. Both sentences are void under the CRFA: the first restricts a covered communication, the second imposes a fee for one. It sits in a form contract: standard terms, every customer, no negotiation. And because the shop has been handing it to every customer for eight months, the shop has been offering a void provision in a form contract on every job in that time. The demand letter would have added an attempt to enforce it, the one thing worse than the clause itself, and the shop's state also has a statute like California's.

What the owner does, in order.

1. No letter. The demand is never sent.
2. The clause comes out of the template that day, and the attorney reviews the rest of the terms for anything else inherited. She finds a warranty term conditioning coverage on "not disparaging Company," which goes too.
3. Open contracts. The attorney advises the shop on whether and how to tell customers with open contracts that section 11 will not be enforced. That is her call, made on the shop's state law.
4. The review itself. The owner reads it against the job record. The job did run over; the drop cloths were left. The review is harsh and substantially true. He replies publicly in three sentences: the job ran long, the cleanup was not up to standard, and he would like to make it right. He calls the customer, sends a crew back for an hour to finish cleanup, and leaves the review alone.

The customer updates the review to three stars. That is not the point of the exercise, and the owner did not ask. See related: Writing a Review Response That Sounds Human.

What a shop may lawfully do about a review that is actually false

The CRFA does not leave you without options; it removes the contract as one of them. What remains, roughly in the order a shop should reach for them:

• Reply publicly and factually. State what happened without arguing the customer's feelings and without disclosing their personal details. For most reviews this is the whole response, because the next customer reads your reply as closely as the review.
• Flag it to the platform where it breaks the platform's own content policy: the reviewer was never a customer, it is about a different business, it contains threats or personal information, or it is part of a pattern of fake reviews. See related: How to Dispute and Remove Unfair Google and Yelp Reviews.
• Treat extortion as extortion. A reviewer who offers to remove a review for a refund or a payment is a different problem. See related: Fake Review Extortion and Review Bombing.
• Defamation is a lawsuit, not a letter. A review that states false facts, not opinions, and damages the business may be defamatory under state law. But many states, including California and Texas, have anti-SLAPP statutes that let a defendant sued over speech on a public issue move to dismiss early and, if they win, recover attorney fees from the business that sued. A review dispute that ends with the shop paying the reviewer's lawyer is a real outcome. That decision belongs to a defamation attorney with the review, the job record and evidence of falsity in hand, not to the office manager. And threatening suit as a pressure tactic over a truthful review can itself run into the FTC's rule against review suppression. See related: The FTC Rule on Fake Reviews and Testimonials.

What you may never do, contract or no contract: offer a refund, discount or warranty extension conditioned on the customer taking a review down or changing it, if what you are really buying is silence about an honest experience.

How to verify your paperwork is clean

Search every customer-facing document you use, estimate terms, service agreements, membership terms, booking-page terms, warranty certificates and settlement templates, for the words review, comment, post, publish, disparage, defame, statement, rating and reputation. Read every sentence that comes back and ask whether it restricts, penalizes or takes ownership of what a customer says about you. If it does, it comes out, and the template date and the removal date go in your records.

References

• Consumer Review Fairness Act of 2016, 15 USC 45b
• California Civil Code 1670.8
• FTC, Consumer Review Fairness Act: What Businesses Need to Know
• See related: Fake Review Extortion and Review Bombing; How to Dispute and Remove Unfair Google and Yelp Reviews
• See related: Reputation Recovery After a Public Mistake