Veri-Tax Terms & Conditions: Top Legal Risks and Redline Solutions for 2024 | Erayaha

## When Ambiguity Costs Millions: A Legal Case Study on Veri-Tax’s Terms & Conditions

Imagine a scenario where a single ambiguous clause exposes a company to regulatory fines exceeding $2 million under GDPR or CCPA, or a limitation of liability fails to shield against a $500,000 data breach lawsuit. Our analysis of Veri-Tax’s Terms & Conditions uncovers four critical legal and logical risks that could result in significant financial and reputational harm if left unaddressed.

1. Ambiguous Data Retention and Deletion Policy Veri-Tax’s policy on data retention after account closure lacks specificity, potentially violating privacy regulations such as GDPR (Art. 17) and CCPA (Cal. Civ. Code §1798.105), which mandate clear data deletion rights and timelines. This ambiguity could expose Veri-Tax to regulatory penalties up to 4% of annual global turnover or $7,500 per affected California consumer.

Legal Analysis

high Risk

Removed

Added

If you close your Veri‐-Tax account, we will mark your account in our database as “Closed,” but will keepand retain your account information in our database. This is necessary in order to deter fraud,Personal Information only for the minimum period required by ensuring that persons who try to commitapplicable law or for legitimate fraud will not be able to avoid detection simply by closing their account and opening a new account. Howeverprevention purposes, if you closeafter which your account, your Personal Information will not be used by us forsecurely deleted or anonymized. You may request deletion of your Personal Information at any further purposestime, nor sold or shared with third parties, except as necessarysubject to prevent fraud and assist law enforcementlegal retention requirements, as required by law or in accordance with this Privacy PolicyGDPR Article 17 and CCPA §1798.105.

Legal Explanation

The original clause lacks specificity regarding retention periods and user deletion rights, risking non-compliance with GDPR and CCPA. The revision provides clear retention limits and user rights, reducing regulatory exposure.

2. Overbroad Amendment Clause The ability to unilaterally amend the privacy policy without user consent or clear notice undermines contract enforceability and may conflict with consumer protection laws. This loophole increases the risk of class action litigation, with potential settlements in the range of $250,000–$1 million for similar cases.

Legal Analysis

high Risk

Removed

Added

We may amend this policy by providing you with at least 30 days’ prior written notice of any time by posting a revised version on our websitematerial changes. The revised version will be effective at the time we post it. Your continuedContinued use of Veri‐-Tax Services after the effective time of any change or update shall indicate yourdate constitutes acceptance of any such change or updatethe revised policy. Material changes affecting your rights will require affirmative consent where required by law.

Legal Explanation

Unilateral amendment without notice or consent is unenforceable in many jurisdictions and may violate consumer protection laws. The revision ensures adequate notice and, where necessary, affirmative consent, enhancing enforceability.

3. Limitation of Liability: Insufficient Carve-Outs The limitation of liability clause fails to explicitly exclude liability for gross negligence, willful misconduct, or statutory violations. Courts routinely strike down such overbroad clauses, exposing companies to uncapped damages—potentially exceeding $1 million per incident in data breach or fraud cases.

Legal Analysis

critical Risk

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Added

BY USING THE VERI‐-TAX SERVICES, YOU AGREE THAT OUR LIABILITY TO YOU FOR ANY VIOLATION OF THE TERMS OF THIS PRIVACY POLICY SHALL BE LIMITED TO THE FULLEST EXTENT PERMITTED BY LAW TO THE TOTAL AMOUNT OF FEES THAT YOU HAVE PAID TO USBY YOU FOR VERI‐-TAX SERVICES IN THE TWELVE MONTHS PRECEEDINGPRECEDING ANY CLAIM, EXCEPT THAT THIS LIMITATION SHALL NOT APPLY TO LIABILITY ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR VIOLATION OF APPLICABLE LAW.

Legal Explanation

The original clause is overbroad and likely unenforceable as it attempts to limit liability for gross negligence, willful misconduct, or statutory violations. The revision carves out these exceptions, aligning with legal standards and reducing the risk of judicial invalidation.

4. Vague Third-Party Data Sharing Restrictions While service providers are restricted from disclosing personal information, the language is unclear regarding audit rights and enforcement mechanisms. This gap can lead to unauthorized disclosures, triggering regulatory investigations and fines (GDPR Art. 28, CCPA §1798.140(w)), with average incident costs of $200,000–$500,000.

Legal Analysis

high Risk

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Added

Service providers under contract who helpassist with fulfillment of customer orders and/or parts of our business operations such as fraud prevention, bill collection, marketing and technology providers may not discloseare prohibited from disclosing your Personal Information to any third parties and that they may only use your Personal Information in connection with theit only for services they performperformed for us. We reserve the right to audit service providers’ compliance with these obligations and not for their own benefitwill require written certification of compliance upon request.

Legal Explanation

The original clause lacks enforceable audit rights and compliance mechanisms, which are required under GDPR Article 28 and CCPA. The revision adds audit and certification requirements, strengthening contractual controls and regulatory compliance.

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Conclusion: Proactive Legal Protection is Essential Our examination shows that addressing these four issues can dramatically reduce Veri-Tax’s exposure to regulatory fines, litigation, and reputational damage. Proactive contract redlining not only strengthens enforceability but also demonstrates a commitment to privacy, compliance, and customer trust.

Are your contracts exposing your business to avoidable legal risk?
How often do you review and update your terms to reflect evolving regulations?
What would a $2 million regulatory fine mean for your bottom line?

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.