A recent BBC News story serves as a serious warning to pay attention to the small print in contracts. It came up in context of – frankly – ludicrous terms in on-line purchases, which purport to deprive you of your right to complain online, or something much worse. It highlights some of the less obvious dangers of being unreasonable in your own business terms.

A Utah couple had their credit rating damaged after they were purportedly ‘fined’ $3,500 under some on-line terms of sale for writing a negative online review. The review was posted several years earlier when a PayPal transacted Christmas present order (for a $20 gift) did not arrive; it said there is absolutely no way to get in touch with a physical human being” and that the vendor company had “horrible customer service practices”. The relevant company eventually demanded the review be removed or the sum of $3,500 be paid under a “non-disparagement” clause contained within the small print of their online terms of sale, which purported to prevent individuals “from taking any action that negatively impacts the Company, its reputation, products, services, management or employees”. It was not possible to remove the review, so the ‘fine’ was entered into the couple’s credit record, resulting in widespread adverse publicity for the vendor company after the couple and their young family were apparently left without heating for 3 months as a result. They have now, reportedly, retained a public interest lawyer to sue the company in question for $75,000.

Whilst the question of enforceability under English law is subject to the Unfair Contract Terms Act 1977 (UCTA), which would almost certainly strike down such provisions here, this US Story calls to mind also the “Immortal Soul” clause used by UK retailer GameStation.com in 2010, whereby the consumer was, by contract at least, parting with their soul. GameStation.com did this to highlight the fact that online shoppers very rarely read online terms, and it seems that 88{ba3215b0bf35eaeb06be458b3396ffbfc50bb9db10c9ff1594dfc3875e90ea48} of individuals did not read the clause and, theological argument aside, consequently lost their souls to the corporate world. The 12{ba3215b0bf35eaeb06be458b3396ffbfc50bb9db10c9ff1594dfc3875e90ea48} of individuals who opted out of the clause were rewarded with £5 discount vouchers and GameStation.com later, generously, restored the lost souls free of charge.

The important lesson for business here is that you should always make sure your own Terms and Conditions are right for your business. Whilst contracting parties in the UK are bound by legislation and case law about contractual terms, small print (and how you seek to apply it) can also be big news. The fact that the vendor’s stance regarding the US couple became a worldwide story is testament to that.

I have been working in or around legal disputes for around 15 years and in that time I have learned that no dispute is more damaging to a business than one which calls into doubt its integrity. Journalists love to shine a light on abuses of the law or market position, and delight in helping finding small print which makes the party relying on the terms appear stupid, malicious or unprincipled.

My advice is that every business should know exactly what it’s message to market is, and ensure that it reflects its vision and its values in everything it does. It follows that the business should not be relying solely on standard terms or something written for them years ago, but should know exactly what terms it is putting out now, and exactly why those terms are in there. What do the terms on which you contract say about you to the world at large? Are you fair and reasonable, or the sort of person who hides onerous provisions as traps in overlong or complex clauses?

The added benefit to making your terms clear and fair, of course, is that if there is a dispute your terms will generally stand the test, meaning less cost, less exposure, and less chance of having to shut down your business, change your name and run for the hills!