Pukka, Inc. Terms & Conditions: 4 Critical Legal Risks and How to Fix Them | Erayaha

## When Legal Ambiguity Can Cost Millions: Pukka, Inc.'s Terms Under the Microscope

Imagine facing a $2 million lawsuit or a GDPR fine of up to €20 million—all because of unclear contract language or missing compliance safeguards. Our analysis of Pukka, Inc.'s Terms & Conditions reveals four critical legal and logical issues that could expose the company to significant financial and regulatory risk. Here’s what every business leader should know—and how these risks can be proactively addressed.

1. Ambiguous Limitation of Liability: Unenforceable Caps Pukka’s limitation of liability clause attempts to cap damages to the amount paid by the user in the preceding 12 months. However, it lacks specificity regarding statutory exceptions and does not clarify its application across jurisdictions. Courts have frequently invalidated such clauses when they are overly broad or conflict with mandatory consumer protection laws (see: UCTA 1977, US state consumer statutes). If challenged, Pukka could face uncapped liability—potentially resulting in multi-million dollar exposure.

Legal Analysis

critical Risk

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Added

In no event shallExcept where prohibited by applicable law, the Owner, and its subsidiaries, affiliates, officers, directors, agents, co-branders, partners, suppliers and employees be liable’s liability for any claims, proceedings, liabilities, obligations, damages, losses, or costs in an amount exceedingarising out of or relating to these Terms shall be limited to the greater of (a) the total amount paid by the User to the Owner hereunder in the preceding 12 months, or the period of duration of this agreement between the Owner and User(b) $10, whichever is shorter000. This limitation shall not apply to liability arising from gross negligence, willful misconduct, death, personal injury, or any other liability that cannot be excluded or limited by law.

Legal Explanation

The original clause is overly broad, lacks carve-outs for statutory exceptions, and may be deemed unconscionable or unenforceable in many jurisdictions. The revision clarifies exceptions and aligns with international best practices, reducing the risk of the entire clause being struck down.

2. Insufficient Data Privacy Commitments: Regulatory Exposure The Terms refer users to a separate privacy policy but do not specify how personal data is processed or protected within the contract itself. This omission creates a compliance gap under GDPR and CCPA, where explicit contractual commitments are required. Regulatory fines for non-compliance can reach €20 million or 4% of annual turnover (GDPR Art. 83).

Legal Analysis

high Risk

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To learn more about the use of theirThe Owner shall process and protect Users’ personal data in accordance with applicable data protection laws, Users may referincluding but not limited to GDPR and CCPA. The Owner commits to implementing appropriate technical and organizational measures to safeguard personal data and will only process such data for specified, explicit, and legitimate purposes as outlined in the privacy policy of this Application.

Legal Explanation

The original clause fails to create binding contractual obligations regarding data protection. The revision incorporates explicit commitments, ensuring compliance with GDPR/CCPA and reducing regulatory risk.

3. Overbroad Indemnification: Unreasonable User Burden The indemnification clause requires users to indemnify Pukka for any third-party claims "due to or in relation with any culpable violation" of the Terms, including actions by affiliates or employees. This language is overly broad, potentially unenforceable, and exposes users to disproportionate financial risk—contrary to fair contract principles and consumer protection laws. Litigation over such clauses can result in six-figure legal costs and reputational damage.

Legal Analysis

high Risk

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The User agrees to indemnify and hold the Owner and its subsidiaries, affiliates, officers, directors, agents, co-branders, partners and employees harmless from and against any claim or demand ⁠— including but not limited to lawyer's fees and costs ⁠— made by any third-party due toclaims arising directly from the User’s willful misconduct or in relation with any culpable violationmaterial breach of these Terms, third-party rights or statutory provisions connected to the use of the Serviceprovided such claims are not caused by the UserOwner’s own negligence or its affiliatesmisconduct. Indemnification shall be limited to reasonable, officers, directors, agents, co-branders, partnersdirect damages and employeesshall not apply to the extent allowed by applicable lawindirect, incidental, or consequential losses.

Legal Explanation

The original clause is overly broad and may be unenforceable, especially against consumers. The revision narrows the scope, aligns with fair contract principles, and reduces the risk of disproportionate user liability.

4. Jurisdiction and Governing Law: Inconsistent and Risky The Terms designate the courts and law of the Owner’s location as governing, but carve out exceptions for certain consumer groups (EU, Switzerland, Brazil). However, the language is inconsistent and may conflict with mandatory local consumer protections, leading to forum shopping or unenforceable judgments. This increases the risk of protracted international litigation, with costs easily exceeding $500,000 per dispute.

Legal Analysis

medium Risk

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These Terms areshall be governed by and construed in accordance with the lawlaws of the place where the Owner is based, as disclosed in the relevant section’s principal place of this documentbusiness, without regard to conflict ofexcept where mandatory consumer protection laws principles. However, regardless of the aboveUser’s jurisdiction require otherwise. In such cases, ifthose mandatory provisions shall apply. Any disputes arising from these Terms shall be subject to the lawexclusive jurisdiction of the country that the User is located in provides for highercompetent courts as determined by applicable consumer protection standards, such higher standards shall prevaillaw.

Legal Explanation

The original clause is inconsistent and may conflict with mandatory local laws, leading to enforceability issues. The revision clarifies the hierarchy of laws and jurisdiction, reducing the risk of forum shopping and unenforceable judgments.

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Conclusion: Proactive Legal Risk Management is Essential Our examination shows that even well-intentioned Terms & Conditions can harbor costly loopholes. Addressing these four issues will not only reduce Pukka’s exposure to regulatory fines and litigation but also strengthen trust with users and partners.

Are your contracts exposing your business to hidden liabilities?
What would a regulatory audit reveal about your compliance posture?
How often are your terms reviewed for enforceability and fairness?

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.