A Closer Look at California Privacy Law Bar on Two Contract Clauses
*This article first appeared in Law360 on July 8, 2019
In September of 2018, California passed a significant new consumer privacy law, the California Consumer Privacy Act, which is the first U.S. law to regulate how businesses with a presence in California collect, share, and use consumer data. The CCPA not only imposes significant compliance obligations on companies conducting business with California residents but also incentivizes class action litigation through both the CCPA’s private right of action and California’s Unfair Competition law.
California Privacy Law Will Likely Prompt Flood Of Class Actions
*This article first appeared in Law360 on May 15, 2019.
The California Consumer Privacy Act, known as the CCPA, is a new law set to go into effect on Jan. 1, 2020. The CCPA is the first U.S. law that will require businesses with an online presence in California to focus on user data and it regulates how businesses collect, share and use such data. One of the most significant risks to online business providers in California is that the CCPA provides for a private right of action for California consumers.
Terms and Conditions: Recent Supreme Court Decisions Highlight There is More to Consider than Just the Privacy Policy
Your website is essential to your online business. By developing and presenting an online presence, however, you take on legal obligations to your users. It is, therefore, a timely exercise to stop and take stock of your terms and conditions in light of recent developments in the law, consumer expectations, and your legal risk profile. The privacy policy has been getting a lot of attention lately as many websites, services and apps are rushing to get their new privacy policies in place in light of the California Online Privacy Protection Act (“CalOPPA”). But updating the privacy policy is only one step in protecting your business in this digital economy. Terms and conditions are an important tool for limiting a company’s exposure to the various legal risks inherent in conducting business online. Boilerplate provisions can leave you exposed and frustrate your customers. Companies should critically consider the nature and needs of the business and transactions that may occur on their websites to determine what types of provisions will be beneficial and best practices for creating a binding contract.
Terms and conditions generally specify the rules governing the use of a website or mobile application. Since every website is different, custom-drafted terms and conditions are necessary to protect a particular business. Well-crafted terms and conditions might address issues such as payment, taxes, refunds, gift certificates, accounts, disclaimers, user behavior on your site, warranties and limitations on liability.
First Circuit’s Decision Provides Guidance on Creating Enforceable Website Terms and Conditions
On June 25, the United States Court of Appeals for the First Circuit in Cullinane v. Uber Technologies, Inc., __ F.3d __, 2018 WL 3099388 (1st Cir. 2018), evaluated the enforceability of arbitration provisions in online contracts. The First Circuit found Uber’s arbitration provision, which contained a class action waiver, unenforceable because Uber did not make its terms of service sufficiently conspicuous. Cullinane highlights the importance of obtaining customers’ affirmative consent to an online contract and reaffirms that conspicuousness of the arbitration agreement and the form of assent that retailers require from consumers remain paramount.
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