Recent Ruling Creates Potential Liability For Use of Common Contractual Terms
Contracts containing uniform terms and conditions are a common feature of modern commercial life, write James F. Bogan III and William D. Meyer of Kilpatrick Townsend & Stockton LLP.
“Consumers are oftentimes required to agree to such contracts in order to buy a good or service, and the contracts typically contain provisions that benefit the business/seller and limit the legal remedies available to the consumer/buyer. While the law generally favors freedom of contract and supports the enforceability of uniform terms and conditions, a recent case applying New Jersey law shows that a business could be exposed to liability – including as a class action defendant – for simply including certain types of limiting clauses in consumer contracts,” they explain.
In their article, they discuss the case of Johnson v. Wynn’s Extended Care, Inc., in which the 3rd Circuit Court of Appeals ruled that a consumer has a valid cause of action against a business where its service contract simply contains a provision waiving attorneys’ fees and splitting costs.
