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Last month, the New York Times reported that food manufacturer, General Mills, added new legal terms to its website which stated that consumers give up their rights to sue the company when interacting with them on social media.
So has all that money spent planning, building, maintaining and staffing courthouses in hundreds of American towns and cities been a complete waste of time? Can interacting with a brand online limit a consumer’s ability to litigate against it?
We asked Chris Hegerty, a solicitor specialising in consumer law at Slater & Gordon, to see how far companies can go in the UK...
A company can, in theory, contract with a customer on any terms it likes. But there are several major restrictions, particularly the Unfair Contract Terms Act 1977 (UCTA 1977) and the Unfair Terms in Consumer Contracts Regulations (UTCCR). These impose a reasonableness requirement on terms and the bar is set quite high for consumer contracts—those where one party has considerably less bargaining power than the other or where dealing on one party’s standard terms.
General Mills has attempted to extend the decision in AT&T Mobility v Concepcion 563 US 321 (2011) in which the Supreme Court of the United States allowed mandatory binding arbitration in consumer contracts.
The US position is based on the common law and statute. Like the UK, the US has specific statutes to address particular varieties of contract—in the General Mills case the claim relied on California’s Consumer Legal Remedies Act (Cal Civ 1750–1784) which provides for specific remedies for unfair or deceptive sales practices. The US also allows in certain cases for treble damages which make class action lawsuits attractive to claimant lawyers on contingency fee arrangements and by allowing arbitration clauses can prevent consumers from bringing such class actions.
In the UK there are significant statutes which alter the law in respect of contract of sale and supply of services such as the Sale of Goods Act 1979 and also specific consumer protections such as UCTA 1977 and UTCCR.
Although both systems of law allow significant freedom to contract, the UK also has the benefit of more strict European law to protect consumers—UTCCR and the Consumer Protection Act 1987 being significant examples.
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