A remarkable story in today's Daily Telegraph, which reports that a US hotel charges guests a $500 "fine" for every negative review posted online by them, or anyone in their party, about the hotel. The hotel's website warns prospective guests as follows:

"If you have booked the Inn for a wedding or other type of event anywhere in the region and given us a deposit of any kind for guests to stay at USGH there will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any Internet site by anyone in your party and/or attending your wedding or event."

This isn't a classic penalty clause, as it's not a sum stipulated to be paid upon breach of contract, but it's certainly something that would put most contractors "in terrorem", to use the Dunlop Tyres case language, I should have thought.

Assuming that the posted warning becomes a term of the contract, it would surely - were this to be a case subject to UK law - be struck down by the Unfair Terms in Consumer Contracts Regulations 1999. Can anyone enlighten me on what the position in the US would be?

I think I can safely say that I shan't be staying at this hotel any time soon on a visit to the US!

Martin

The story us reported here:
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/11011671/The-hotel-that-charges-guests-500-for-every-negative-online-review.html


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