Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: January 26, 2017
The Firm
201-896-4100 info@sh-law.com
Online reviews are poised to become more credible in the New Year. Former President Barack Obama recently signed the Consumer Review Fairness Act of 2016 into law. The new law prevents businesses from contractually prohibiting consumers from posting negative online reviews.The new law addresses the increasing use of consumer agreements to deter negative criticism via websites like Yelp. In basic terms, non-disparagement clauses impose monetary or other penalties on customers who post negative online reviews about a company’s products or services. In one highly publicized case, a New York hotel required couples that rented its wedding facility to sign a contract stating that they would be required to pay a $500 fine for every negative review posted by the couple or their guests.
The Consumer Review Fairness Act of 2016 voids a provision of a form contract if such provision:
Under the law, a “covered communication” is defined as “a written, oral, or pictorial review, performance assessment of, or other similar analysis of, including by electronic means, the goods, services, or conduct of a person by an individual who is party to a form contract with respect to which such person is also a party.”
Businesses should be aware that the Consumer Review Fairness Act only applies the non-disparagement clauses in consumer contracts and not other types of business agreements. For instance, the Act expressly states it does not apply to employer-employee or independent contractor contracts. It also does not interfere with civil actions for defamation, libel, or slander; a party’s right to establish terms and conditions for content created by an employee or independent contractor; or a party’s right to remove or refuse to display content that contains personal information or obscene or inappropriate material.
The Federal Trade Commission (FTC) is empowered to penalize violators under its authority to prevent deceptive trade practices and unfair competition. On the state level, attorneys general are also authorized to bring actions under the new law.
The Consumer Review Fairness Act mandates that the FTC publish best practices for compliance within 60 days of the its enactment. We encourage businesses to check back for updates.
Do you have any questions about the Consumer Review Fairness Act or how it may affect you? Would you like to discuss the matter further? If so, please contact me, Dennis Linken, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer

Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.

On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Author: Dan Brecher

Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]
Author: Dan Brecher

High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Author: Dan Brecher

Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
Author: Ken Hollenbeck
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!