Legal Risks in The Fresh Air Fund's Terms: Key Gaps and Enforceability Issues Revealed | Erayaha

## When We Examined The Fresh Air Fund’s Terms: Four Legal Risks That Could Cost Millions

Imagine a scenario where a single ambiguous clause in your Terms of Use exposes your organization to a $1.2 million class action lawsuit, or a vague privacy statement triggers a GDPR fine of up to €20 million. Our analysis of The Fresh Air Fund’s Terms reveals four key legal and logical gaps that could have significant financial and reputational consequences.

1. Ambiguous Limitation of Liability: Unenforceable in Many Jurisdictions The current limitation of liability clause attempts to broadly disclaim all damages, including direct, indirect, and consequential damages. However, U.S. state laws (e.g., New York General Obligations Law § 5-322.1) and international consumer protection regulations often prohibit blanket waivers of liability, especially for gross negligence or willful misconduct. This exposes the organization to unpredictable litigation costs and regulatory penalties if challenged in court.

Legal Analysis

critical Risk

Removed

Added

UNDER NO CIRCUMSTANCES SHALL WE ORTO THE FULLEST EXTENT PERMITTED BY EXTENSION OUR OWNERSAPPLICABLE LAW, AFFILIATES, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, CONTRACTORS OR SERVICE PROVIDERS BE LIABLEOUR LIABILITY FOR ANY DIRECT OR INDIRECT, ACTUAL, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES THAT MAY ARISEARISING FROM THE SERVICES IS LIMITED TO THE AMOUNT PAID BY YOU, INCLUDINGIF ANY, WITHOUTFOR ACCESSING THE SERVICES DURING THE TWELVE (12) MONTHS PRECEDING THE CLAIM. THIS LIMITATION DOES NOT APPLY TO DAMAGES RESULTING FROM OUR GROSS NEGLIGENCE, ANY LOST PROFITSWILLFUL MISCONDUCT, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATIONVIOLATIONS OF LIABILITY FOR CERTAIN DAMAGESLAW, AND IN SUCH JURISDICTIONS OURDOES NOT LIMIT LIABILITY IS LIMITED TO THE GREATEST EXTENT PERMITTEDWHERE PROHIBITED BY APPLICABLE LAW.

Legal Explanation

The original clause attempts a blanket exclusion of all liability, which is unenforceable in many jurisdictions and may be struck down by courts. The revision aligns with legal standards by capping liability, carving out exceptions for gross negligence and statutory violations, and referencing applicable law.

2. Vague Privacy Commitment: Insufficient for GDPR/CCPA Compliance The privacy language states that personal information is handled per the Privacy Policy but lacks explicit commitments to legal bases for processing, user rights, or breach notification obligations. Under GDPR, non-compliance can result in fines up to 4% of annual global turnover or €20 million, whichever is higher. U.S. class actions for privacy violations routinely settle for six to seven figures.

Legal Analysis

high Risk

Removed

Added

We value your privacy,collect and anyprocess personal information collected by usonly for specified, explicit, and legitimate purposes as outlined in connectionour Privacy Policy, in compliance with applicable privacy laws including GDPR and CCPA. Users have the Servicesright to access, correct, or delete their data, and will be maintained in accordance with our posted Privacy Policynotified of any data breaches as required by law.

Legal Explanation

The original clause is too vague and does not address key privacy rights or legal bases for processing. The revision introduces explicit compliance language, user rights, and breach notification, aligning with GDPR/CCPA requirements.

3. Overbroad Indemnification: Shifting All Risk to Users The indemnification clause requires users to indemnify The Fresh Air Fund for any damages arising from their use of the Services, without limitation or reciprocal obligations. Courts often strike down such one-sided clauses as unconscionable, and they may be unenforceable under New York law. This creates a false sense of security and could result in costly, protracted litigation.

Legal Analysis

high Risk

Removed

Added

You further agree to indemnify and hold us, and by extension our owners, affiliates, officers, directors, agents, employees, contractors or service providers, harmless from any claim or demand, including reasonable attorneys’ fees, made by any third-party due to orclaims arising out of: (i)solely from your material breach of these Terms; (ii) or your activities in connection withunlawful use of the Services, including any violationprovided that such indemnity does not apply to claims resulting from our own negligence, willful misconduct, or breach of any law or the rights. We will provide prompt notice of any third party that occurs in connection with your of the Services; or (iii) information thatclaim and allow you provided to us throughparticipate in the Servicesdefense.

Legal Explanation

The original clause is overbroad, shifting all risk to users and lacking reciprocal obligations. The revision narrows the scope, excludes indemnity for the organization's own wrongdoing, and adds procedural fairness, making the clause more likely to be enforced.

4. Intellectual Property Restrictions: Overly Broad and Potentially Unenforceable The IP section prohibits any copying, distribution, or derivative works, but does not provide for fair use exceptions or user-generated content rights. This could chill legitimate use and is likely unenforceable against users in educational or non-commercial contexts, risking both legal challenges and reputational harm.

Legal Analysis

medium Risk

Removed

Added

Except as provided hereinexpressly permitted by law (including fair use and educational exceptions) or as otherwise authorized in writing, none of the Materialsusers may be copiednot copy, distributeddistribute, displayeddisplay, downloaded, licensed, modified, published, reor create derivative works from the Materials. User-postedgenerated content remains the property of the user, reproduced, reused, sold, usedsubject to create a derivative work, or transmitted in any form or by any means without prior written permissionnon-exclusive license granted to us for use within the Services.

Legal Explanation

The original clause is overly broad and may be unenforceable against legitimate fair use or user-generated content. The revision acknowledges statutory exceptions and clarifies user rights, reducing legal risk and improving enforceability.

---

Conclusion: Proactive Legal Protection Is Essential Our examination shows that these four issues—ambiguous liability, vague privacy terms, overbroad indemnity, and restrictive IP language—could expose The Fresh Air Fund to substantial financial and regulatory risks. Proactive redlining and legal review can prevent costly disputes and ensure compliance with evolving laws.

Are your contracts exposing you to hidden liabilities? How often do you review your terms for regulatory compliance? What would a single lawsuit cost your organization?

This analysis is for educational purposes only and does not constitute legal advice. For actual legal guidance, consult with a licensed attorney. This assessment is based on publicly available information and professional legal analysis. See erayaha.ai’s terms of service for liability limitations.