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Businesses Beat Lawsuits Alleging Website Terms Violate New Jersey Law

Every retailer that does business in New Jersey needs to know about New Jersey’s Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”), which was passed in 1981 to protect the rights of consumers from allegedly deceptive practices in consumer contracts, warranties, notices and signs. Recently, however, the TCCWNA has been the basis of a flurry of pre-suit demand letters to retailers and class action lawsuits filed in state and federal courts in New Jersey.

The TCCWNA’s prohibition of the use of certain terms or disclaimers in warranties, consumer contracts, and other consumer-facing  materials  has been interpreted to include language typically used by retailers in their websites’ terms and conditions, rules of use, on social media, and in contracts – such as commonly used provisions seeking to hold the retailer harmless/limit liability, requiring the customer to assume risks, provisions waiving certain fees and costs, and cost-shifting language.  A general disclaimer directed to New Jersey residents has been deemed insufficient to satisfy the requirements of the statute.

However, businesses have had some recent success in defeating TCCWNA claims.  For example, in Palomino v. Facebook, Inc., No. 16-cv-04329-HSG, (N.D. Cal. Jan. 9, 2017), Facebook was successful in dismissing a putative class action against it alleging a violation of the TCCWNA based on the choice-of-law clause in its website’s terms of service.  Read further case analysis by clicking here.  

More recently, in Norris Hite v. Lush Internet, Inc., Case No. 16-1533 (D. N.J. March 22, 2017), Lush Internet, Inc. was successful in

Retailers Seek Perfect Balance Between In-Store, Online and Mobile Customers

Retailers are increasingly under pressure to evaluate their business models and, in particular, the mix of their in-store, online and mobile offerings. Just as there are few pure-play e-tailers, there are very few retailers solely operating a bricks & mortar strategy because today’s customer wants to access their favorite brands in an omnichannel way: browsing online to get a sense of trends, dropping into a store to check the fit and shopping via mobile for impulse or last minute buys. But how do retailers find balance within the omnichannel world?

In our experience working with national and international retailers, getting the online and mobile experience right requires critical focus and serious investment in the three Ds: Distribution, Delivery and Data.

Successful ecommerce platforms require well located (and well managed) distribution centers capable of handling the nearly 24-hour demand profile.

Careful consideration needs to be given to whether an existing distribution center supporting stores can also support online, or whether it would be better to invest in an expanded footprint of distribution centers while reducing the number of stores. Retailers prepared to serve an international online market also need to understand the logistics landscape and either partner with a logistics expert with a solid track record of supporting international online retailers or build in-house expertise to manage not only export and customs issues (so customers can enjoy a hassle free experience) but also local law compliance relating to product labeling and hazardous materials.

Retailers shouldn’t underestimate that customers want an instant

The Hidden Danger for Retailers Doing Business in New Jersey: Alert Regarding the Truth-in-Consumer Contract, Warranty and Notice Act

A New Jersey statute intended to prevent deceptive practices in consumer contracts recently has become a focus for litigation in the state.

The Truth-in-Consumer Contract, Warranty and Notice Act, N.J.S.A. §56:12-14 et seq., (“TCCWNA”) prohibits the use of illegal terms in consumer contracts and also provides that consumer contracts may not state that any of its provisions are void, unenforceable or inapplicable in some jurisdictions “without specifying which provisions are or are not void, unenforceable or inapplicable within the State of New Jersey.” See TCCWNA at §56:12-16. In other words, a general disclaimer regarding a consumer contract that is directed to New Jersey residents is not sufficient. Instead, it appears the customer-facing language used by a retailer should identify the specific provisions of its contracts, warranties, notices, loyalty programs, signs, etc. that are void, unenforceable or inapplicable in New Jersey.

Courts have interpreted the statute to apply to language typically used by retailers in their websites’ Terms and Conditions and Rules of Use, on social media, and in contracts – such as commonly used provisions seeking to hold the retailer harmless or limit liability, requiring the customer to assume risks, and waiving certain fees and costs. As a result, retailers should evaluate all customer-facing language, notices and disclosures to ensure that the rights of New Jersey customers are not being waived or restricted. Retailers should note, however, that plaintiffs are in the process of testing the boundaries of the TCCWNA with courts, which means that the law is unsettled

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