Non-Disparagement Clauses
California has just enacted a law that prohibits ‘non-disparagement clauses’. These are clauses in consumer contracts that prohibit the consumer from criticising the product or services provided under the contract.
Specifically, the statute says this: “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.”
Is there any need for such a provision in Canadian law (federal or provincial)? Are non-disparagement clauses ever seen here? Would a court enforce such a clause under our current law? Should such clauses be enforceable?
Or are Canadian online review sites too tame for merchants and service providers to worry about?
If such a law were appropriate here, would it also need to explicitly override choice of law and forum in the contract?
First, and most importantly, they’re a terrible idea in ordinary business contracts: they are too-often used to bully and silence customers in the same way that SLAPP suits do.
Second, and on the other hand, they are very good additions to Minutes of Settlement.