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Thursday, April 17, 2014

General Mills Leads the Way (Into Compelled Arbitration)

According to this article in today's New York Times, General Mills has added language to its website designed to force anyone who interacts with the company to disclaim any right to bring a legal action against it in a court of law.  If a consumer derives any benefit from General Mills' products, including using a coupon provided by the company, "liking" it on social media or buying any General Mills' product, the consumer must agree to resolve all disputes through e-mail or through arbitration.

Old Mill

The website now features a bar at the top which reads:

We’ve updated our Privacy Policy. Please note we also have new Legal Terms which require all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration. For more information on these changes, please click here

The Legal Terms include the following provisions:

  • The Agreement applies to all General Mills products, including Yoplait, Green Giant, Pillsbury, various cereals and even Box Tops for Education;   
  • The Agreement automatically comes into effect "in exchange for benefits, discounts," etc., and benefits are broadly defined to include using a coupon, subscribing to an e-mail newsletter, or becoming a member of any General Mills website;
  • The only way to terminate the agreement is by sending written notice and discontinuing all use of General Mills products;
  • All disputes or claims brought by the consumer are subject to e-mail negotiation or arbitration and may not be brought in court; and
  • A class action waiver.

The Times notes that General Mills' action comes after a judge in California refused to dismiss a claim against General Mills for false advertising.  Its packaging suggests that its "Nature Valley" products are 100% natural, when in fact they contain ingredients like high-fructose corn syrup and maltodextrin.  The Times also points out that courts may be reluctant to enforce the terms of the online Agreement.  General Mills will have to demonstrate that consumers were aware of the terms when they used General Mills products.  And what if, when they did so, they were wearing an Ian Ayres designed Liabili-T?

http://lawprofessors.typepad.com/contractsprof_blog/2014/04/general-mills-leads-the-way-into-compelled-arbitration.html

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