A recent New York Times article warned consumers that
by clicking "Like" on the Facebook page of General Mills,
the maker of Cheerios and other products, they would be agreeing to
limit themselves to resolve disputes with the company through
informal emails or binding arbitration. Consumers would have no
recourse to the courts and could not participate in a class
proceeding even within the arbitration process. Arbitration clauses
are common in business-to-business
contracts, but General Mills was attempting to impose one on
its relationships with consumers. How? By way of an update to the
Legal Terms page of its website.
The new Legal Terms would apply in the following
These terms are a binding legal agreement
("Agreement") between you and General Mills. In exchange
for the benefits, discounts, content, features, services, or other
offerings that you receive or have access to by using our websites,
joining our sites as a member, joining our online community,
subscribing to our email newsletters,
downloading or printing a digital coupon, entering a
sweepstakes or contest, redeeming a promotional offer, or otherwise
participating in any other General Mills offering, you are agreeing
to these terms.
The arbitration provision is worded as follows:
DISPUTE OR CLAIM MADE BY YOU AGAINST GENERAL MILLS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR YOUR PURCHASE OR USE OF ANY
GENERAL MILLS SERVICE OR PRODUCT (INCLUDING GENERAL MILLS PRODUCTS
PURCHASED AT ONLINE OR PHYSICAL STORES FOR PERSONAL OR HOUSEHOLD
USE) REGARDLESS OF WHETHER SUCH
DISPUTE OR CLAIM IS BASED IN
CONTRACT, TORT, STATUTE, FRAUD, MISREPRESENTATION, OR ANY OTHER
LEGAL THEORY (TOGETHER, A "
DISPUTE") WILL BE RESOLVED BY INFORMAL NEGOTIATIONS OR
THROUGH BINDING ARBITRATION, AS DESCRIBED BELOW.
Noteworthy from the above is that General Mills is not only
attempting to apply the above arbitration provision in
circumstances "relating to this agreement," but also
relating to a consumer's "purchase or use of any General
Mills service or product." The company goes on to say as much
in its Legal Terms: "This Section 3 is intended to be
interpreted broadly to encompass all disputes or claims arising out
of this Agreement or your purchase or use of any General Mills
product or service for personal or household use."
Negative public reaction to the change of the Legal Terms was
immediate. It was unclear whether the "joining our online
community" provision in the above section of the Legal Terms
included clicking "Like" on General Mills' Facebook
page. After the ensuing public backlash, General Mills conceded publicly that simply clicking
"Like" on its Facebook page would not bind consumers to
arbitration. Downloading coupons and joining General Mills' own
online communities would still have that effect, as would buying
It remains to be seen whether the Legal Terms will apply simply
by purchasing a General Mills product at the grocery store and to
what extent consumers are aware that doing so limits their legal
Ontario's Consumer Protection Act, 2002 bans
similar practices and deems as invalid any requirement in a
"consumer agreement" (an agreement between a supplier and
a consumer in which the supplier agrees to supply goods or services
for payment) that requires disputes to be submitted to arbitration.
This limitation only applies to agreements with consumers, who are
defined under the Act to be individuals acting for personal, family
or household purposes and not for business purposes.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
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