A self storage facility, like all businesses, is subject to the risk of dissatisfied customers. Unfortunately, with the use of social media, the megaphone for that dissatisfaction can be widespread. Therefore, if a dispute does arise with a customer and the matter can be resolved, it is important for the facility operator to include in its settlement terms that the facts of the dispute and its resolution are to remain confidential and, most importantly, that the customer will agree to withdraw any negative social media posts that it has placed and will desist from any future negative posting.
The intent of a settlement in a customer dispute (whether the issue involves rent, claims of property loss or damage or even a lien sale) is to resolve the ongoing conflict with the dissatisfied customer. In today’s world, one of the considerations for a facility to agree to the settlement of a claim is not only to find a way to satisfy the unhappy customer but also to avoid the risk of negative customer reviews. Therefore, two vital provisions should be included in any customer settlement agreement. One is a confidentiality provision and the other, a non-disparagement provision. General terms for such provisions are as follows:
Claimant agrees that the terms of this Agreement shall be confidential such that Claimant may not disclose the terms or conditions of this Agreement to any person or entity, unless ordered to do so by a Court of competent jurisdiction or to Claimant’s attorney(s) or accountant for tax and/or income reporting purposes. The Claimant understands and agrees that this Paragraph is a material provision of this Agreement and that any breach of this Paragraph shall be a material breach of this Agreement and that the Respondent (business) would be irreparably harmed by any violation of this provision.
Claimant agrees that it will not, at present and at any time in the future, in any manner or by any medium, disparage Respondent (business), its predecessor and/or successor companies, affiliates, its current and former officers, directors and employees to the press or to any other third party through any verbal or written medium including, but not limited to, social media. For the purpose of this Agreement, disparage is defined as comments or statements that would be detrimental to the good name and/or reputation of the Respondent (business), its predecessor and/or successor companies, affiliates, its current and former officers, directors and employees. The Claimant understands and agrees that this Paragraph is a material provision of this Agreement and that any breach of this Paragraph shall be a material breach of this Agreement and that the Respondent (business) would be irreparably harmed by any violation of this provision.
The power of social media, especially as to the reputation of a business, is significant. If a dispute arises and can be settled, it is important to consider these elements of the settlement agreement as fair consideration for reaching a resolution.
This article was originally published by Scott Zucker, February 2022 in the 'Self Storage Legal Monthly Minute' newsletter.