About the Author

Allan is the cofounder of LessAccounting, loves his family more than breathing and builds weird lamps for fun.

Non-Disparagement Clauses in Service Contracts Could Stop Negative Online Reviews!

Written by on Apr 1
non-disparagement clause

Imagine this…a client hated your work and decides to leave a bad review on Yelp, then talks about it on Facebook, and continues to bad-mouth your work wherever he goes.

CAN I STOP A CLIENT FROM POSTING A BAD REVIEW ABOUT ME? The short answer is “No,” but with a non-disparagement clause you can set up a possible recourse of actions if or when they do.

What is a Non-disparagement Clause?

A non-disparagement clause outlines the financial repercussion a client will face if they post a negative review about the service provider.

Non-disparagement clauses are particularly common in employment agreements and have only recently begun appearing in service-based contracts. Given how new this clause is to the service world, courts are still iffy on its validity. The most recent case on the subject can be found here and here.

How do I draft a non-disparagement clause?

1) Define the Medium

No one really knows whether a specific act may amount to disparagement. Thus defining the term “disparagement” is crucial.

Example [1]:

For purposes of this Section, “disparage” shall mean any negative statements, reviews, comments, or feedback, whether written or oral, about ________________ {insert people, companies, products, etc.} Second, you want to identify the type of medium being used. This will include all written or electronic communication, whether email, text message, use of Yelp, LinkedIn, etc.

2) Liquidated Damages

As part of the clause, you want to account for what happens if a negative review still shows up. One way of dealing with this is by providing a liquidated damages clause. Liquidated damages are a pre-determined amount that the parties agree to as payment for breach of this section. (To learn more about the legal nuances of liquidated damages, please see here.

Disclaimer: Just because a non-disparagement clause is in a contract doesn’t mean that courts will simply accept it. What’s important is that the other side is alerted of the non-disparagement clause while contract negotiations occur. That means you should sit down with the client, discuss the matter, and explain the clause in detail. You don’t want the other side to claim surprise and say, “Oh, I never saw this term in the fine print. How dare you?” Courts are more likely to side with a surprised client.

What’s at risk?

If your client doesn’t like the idea of not being able to give you a bad review, you might have just lost a potential client. Either way, having a non-disparagement clause is a matter of personal preference. However, in an age when an unhappy client can use social media to reach thousands of people, a non-disparagement clause is worth considering.

[1] Source: link

We recommend you hire an attorney to help you with your legal documents and/or use legal document services like Docracy and LawDepot.

DISCLAIMER: This article is just friendly advice and only reflects the personal views of a few ‘ordinary’ people. It may not be the kind of advice that you agree with, nor prove to be helpful for your situation. This article is not a substitute for legal advice from an attorney in your own state. By using this website, you understand that there is no attorney-client relationship between you and the author. We encourage comments and viewpoints but try to be nice!

Read On…

Other Contracts Articles

Hiring Writers?

Written by Allan Branch

As a business owner I hate thinking about legal stuff and contracts, but when you're hiring a writer you must consider legal ramificati...

Stop Bad Photography Reviews

Written by Allan Branch

With the non-disparagement clause you could prevent crazy customers from hurting your online reputation.

Interior Design Contracts

Written by Allan Branch

Interior design contracts can be made easy to understand. A good contract will protect you from possible situations through communicati...

Subcontractor Agreements

Written by Allan Branch

Do you work with subcontractors? Do you use a proper subcontractor agreement that protects you from their mistakes? Read this easy expl...

Employee Agreements

Written by Allan Branch

An employee agreement puts in writing what you expect from your employee, what to keep confidential and who owns the work they produce.

Hire a Small Business Attorney

Written by Allan Branch

How do you find and interview a small business attorney? What do you ask them? What are common issues you might have with them?