In the age of social media, recommendations on sites such as LivingSocial.com, YahooLocal.com and Avvo.com can be a boon for businesses seeking to gain credibility with potential customers. A positive review can help customers understand how they can benefit from using the company’s services, and word-of-mouth advertising is essentially the most effective type of promotion.

However, social media can be a double-egged sword in Denver and across the United States. Negative reviews can be a death knell for a business, as future customers could be scared away by the potential of having a bad experience with the company. With this in mind, where does the law draw the line between critical (yet truthful) comments that may doom a business and statements that are punishable through a lawsuit?

This question is likely to be decided in a court case involving a Washington D.C. based contractor and a former customer. The contractor performed some work on the customer’s home, and the customer was less than pleased with the work done. She took to the website Yelp.com and wrote a scathing review about her experience. The contractor claims that her statements were false and have significantly damaged his business.

Indeed, there are a number of facts that were not revealed within the report produced by ABC News, but it does raise the question of how businesses can defend themselves against slanderous statements.  After all, free speech is the hallmark of our way of life, and for a person to be punished for registering their opinion goes against all we hold dear regarding speech.  At the same time, businesses should not have to operate in fear of dealing with negative statements on social media sites. 

Source: ABC News.com “Scathing Yelp review could cost woman $750K,” Rebecca Jarvis, Jan.28, 2014