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Outsmarting Yelp: Overcoming CDA Immunity via 3rd Party Contract Promises

Daniel Bernath came up with what looks like a stroke of genius. Now, I’m not a lawyer (but he is) so I can’t comment on the legality of it, but the logic looks good.

The idea is that since Groupon REQUIRES you to have a Yelp business profile (with positive reviews) before allowing you to do a Groupon offer, and that Groupon’s Terms of Service are more specific as to the rights of the merchant, that Groupon’s TOS trumps Yelp and that Yelp has to comply. I think…

Here’s what he said in a nutshell:

Defamer comes to Groupon and enters a deal regarding my business. Groupon states in its terms of service they are a service provider for merchant. They also contract with defamer that she has agreed to a 3rd party beneficiary contact and that the merchant can enforce it against Defamer as well as Groupon. Near the bottom of the Terms they clearly state that merchant has right to sue defamer.

Conduct of defamer that she breaches…second to the last bullet point defamer says won’t lie about the merchant, try to put him out of business (I don’t have the exact words).

Then the defamer (in my case) lied about my business. Urged people to breach their contract with me. Said I violated the law, etc.

Therefore, for breach of contract we need offer acceptance, consideration, breach, damages. All the elements have been met. Sue defamer for breach of contract, promissory estopped, breach of covenant of good faith and fair dealing (with and to the merchant) and as she obviously signed this third party beneficiary contract with intent to damage me and not actually to use my services, FRAUD.

Then it gets interesting. You can’t do a Groupon deal unless you make a deal with Yelp. (I just got another merchant who says she had to contract with Yelp before they would do a deal with her.)
Yelp also says in its terms of service (contract) with defamer IN PROVISION OBVIOUSLY MEAN TO PROTECT MERCHANT that defamer won’t lie, defame, etc. Yelp also contract in one paragraph that if a post is anonymous and defamatory that they will “probably deal more harshly” with it than otherwise. As such, they have contracted with merchant to not permit defamation about them.

Add that specific contract clause (merchant is 3rd party beneficiary to the defamer-Yelp contract AND defamer Groupon contract) you can then sue Yelp for breach of contract, fraud, etc. because they let the defamation be published and did not do their duty to take it down.

[warning]IMPORTANT: Yelp is always sleaziness off by saying that the Communication Decency Act Sec. 230 gives them immunity for anything posted on their site by a 3rd party.[/warning]

BUT UNDER THIS THEORY OF THE CASE you are NOT suing for any speech. You are suing because Yelp broke their contractual promise thus bypassing that immunity that has always gotten Yelp off the hook.

If you think I’m making this up, look at Barnes v. Yahoo

The court held that the CDA barred the plaintiff’s negligent undertaking claim because it was based on Yahoo’s failed undertaking to remove or depublish the offensive profiles and, thus, was based on a violated duty that was derived from Yahoo’s conduct as a publisher (CDA Sec. 230 immunityfor Yahoo and Yelp) . Id. at 1103.

However, the court held that the CDA did not bar the plaintiff’s promissory estoppel claim (or other contract claims) because it was based on a violated duty that sprang from an enforceable promise Yahoo had breached, i.e., Yahoo’s promise to the plaintiff to promptly remove the offensive material from its Web site. Id. at 1107-08.

[important]Get it? Not suing Yelp or defamer for “speech.” Suing them for entering into a contract and then breaching a contract with merchant. to protect merchant and not allow defamations and take down defamations.[/important]

Of course, a trial court judge may disagree and then it will have to be appeal…


About the author

Adryenn Ashley

Adryenn Ashley is the mediagenic founder of Wow! Is Me. As an award winning filmmaker and actress she is used to transforming herself and others into riveting onscreen characters. Now she uses her well honed techniques to transform everyday entrepreneurs into wildly successful business celebrities. As a mentor to CEOs worldwide, she is directly responsible for adding significant revenue to her client's bottom line. For information on how you can work with Adryenn Ashley, go to

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  1. Office Movers

    The more I learn about the industry the more I feel unease about it. Every one always has a loophole to get them out of trouble.

  2. Daniel A Bernath

    Trial judge might not welcome this idea but I'll take it to the Court of Appeals of Oregon and Supreme Court. I hope that the judiciary is tired of protecting the "internet modern day mafia" (allegedly).

  3. Angela Lynne Gibson

    Hi, Adryenn! I'm so glad you are addressing this! I know of several businesses who have had to deal with Yelp's sleazy practices – from shill accounts posting negative reviews on competitors Yelp pages, to false praise on other pages, to removing actual legitimate reviews if they are positive, but leaving negative reviews visible.

    Yelp has been involved in multiple lawsuits for their unethical and unlawful practices but it still seems the sleaze continues.

    Several merchants finally gave up and closed their accounts, yet I recognize a large number of people still go to Yelp to get an idea about a business before doing any type of transaction with them ignorantly unaware that the reviews may be biased or entirely fake.

    Thanks for doing your part to keep this in the arena for public discourse. Hopefully more people will begin to understand how unreliable and underhanded Yelp is!

    1. Dan Bernath

      I posted somewhere on your facebook page. Uncle Dan Needs You!

  4. Kari

    Ergo… a workaround. Has great possibilities.

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