The consumer alleged a breach of covenant of good faith and fair dealing, as well as unconscionability under California law. The court held that the issue of the conscionability of the ‘no-refund’ provision, which allowed IMVU to unilaterally alter or remove audio products, was a question of mixed fact and law, and not a question of law alone. This question could not be answered without considering the “commercial setting, purpose, and effect” of the clause.
Given the widespread use of similar types of unilateral amendment provisions in EULA’s, this case is certain to be followed closely.
The article notes that this case “suggests that unilateral amendments of website terms that impact users’ previous purchases without adequate compensation, may be suspect.”
- Unilateral amendments to website user agreements may need to meet a conscionability test.
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