Part 2: The Amazon Business Agreement, Decoded
In this part of the Amazon Agreement, decoded, we’ll examine how Sections 6-8 fully alleviate Amazon.com Inc. from all liabilities that arise from actions of third party sellers. This could include profit loss, damages, illegal measures or unfair competition practices by other third-party sellers that put your seller account at risk, and more.
6. Indemnification. You agree, as a seller, to hold harmless Amazon, their affiliates, and all respective “officers, directors, employees, representatives and agents” against any type of liability that arises from or relates to the following items:
- Your actual or alleged breach of any obligations in the Business Agreement
- Issues with all of your other sales channels
- Your products – from your initial offer, sales and performance, all the way through fulfillment
- Your Materials: This includes any actual or alleged infringement of any Intellectual Property Rights
- Personal injury, death, or property damage related to your personnel (including any action or failure to take action by your personnel)
- Your tax obligations
What exactly does this all mean?
Technically, an indemnification clause is a legal term, impartial to Amazon seller: indemnification is a promise by one party (the seller) to keep another party (Amazon.com Inc.) completely free of liability in the case of any situation that may cause the indemnified party (Amazon) to sue the other. Indemnify and hold harmless both mean to make whole after causing a loss. [StartUp Law Talk]
Amazon’s General Disclaimer and Limitation of Liability
7 (A). Disclaimer & General Release, Part 1.
Take it or leave it: the Amazon sites and services are provided “as-is”. As a seller, you are simply a user of the services which Amazon provides.
“YOU USE THE AMAZON SITES, THE SERVICES, THE MWS SITE, AND SELLER CENTRAL AT YOUR OWN RISK TO THE FULLEST EXTENT PERMISSIBLE BY LAW.”
Once again, we are reminded in this section that Amazon is completely protected against damages to your seller account, regardless of whether these damages arise from negligence or malfunction on Amazon’s behalf or not.
Furthermore, Amazon states in Section 7 of the Business Agreement that if any of their sites or services are temporarily unavailable, they are still not responsible. See exact context below:
“WE DO NOT WARRANT THAT THE FUNCTIONS CONTAINED IN THE AMAZON SITES AND THE SERVICES WILL MEET YOUR REQUIREMENTS OR BE AVAILABLE, TIMELY, SECURE, UNINTERRUPTED, OR ERROR FREE, AND WE WILL NOT BE LIABLE FOR ANY SERVICE INTERRUPTIONS, INCLUDING BUT NOT LIMITED TO SYSTEM FAILURES OR OTHER INTERRUPTIONS THAT MAY AFFECT THE RECEIPT, PROCESSING, ACCEPTANCE, COMPLETION, OR SETTLEMENT OF ANY TRANSACTIONS.”
Bottom line? If seller central has a glitch, or if your FBA refunds aren’t processing properly, or if Amazon seems to be “losing” every other shipment you send in, it’s still your responsibility — not theirs.
7 (B). Disclaimer & General Release, Part 2. Amazon is not liable for any disputes that happen on the marketplace – they are simply a marketplace on which sellers may conduct business.
Amazon is not to be responsible for any type of disputes between sellers and other sellers, between buyers and sellers, or between sellers and their competitors.
“BECAUSE AMAZON IS NOT INVOLVED IN TRANSACTIONS BETWEEN CUSTOMERS AND SELLERS OR OTHER PARTICIPANT DEALINGS, IF A DISPUTE ARISES BETWEEN ONE OR MORE PARTICIPANTS, EACH PARTICIPANT RELEASES AMAZON (AND ITS AGENTS AND EMPLOYEES) FROM CLAIMS, DEMANDS, AND DAMAGES (ACTUAL AND CONSEQUENTIAL) OF EVERY KIND AND NATURE, KNOWN AND UNKNOWN, SUSPECTED AND UNSUSPECTED, DISCLOSED AND UNDISCLOSED, ARISING OUT OF OR IN ANY WAY CONNECTED WITH SUCH DISPUTES.”
In the landmark court case of Milo & Gabby LLC vs. Amazon.com Inc, decided in May 2017 after a four-year lawsuit, Amazon sellers with their own brand attempted to press charges against Amazon for damages to their business as a result of counterfeiters.
Karen and Steve Keller, founders of Milo & Gabby, filed a complaint against Amazon in October of 2013 for the variety of knockoff sellers who had jumped onto their listing for product, Cozy Companion Pillowcases, for which they owned a registered trademark. Amazon removed the product listings and suspended the third-party sellers from Amazon’s online marketplace when they received word of the lawsuit.
MILO & GABBY LLC, KAREN KELLER, Plaintiffs-Appellants
AMAZON.COM, INC., Defendant-Appellee
This case officially separated Amazon.com from the actions of third party sellers. Amazon, is simply a platform on which businesses may conduct sales, the court states. Their behavior is not to be misinterpreted as acceptable by Amazon– Amazon has established that they are just the marketplace. What sellers do is their business, including hijacked listings, suspended accounts for any reason, repeat negative reviews, and test buys. Sellers, not Amazon as a corporation, are to be held liable for their own actions.
8. Limitation of Liability.
WE WILL NOT BE LIABLE (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, PRODUCT LIABILITY, OR OTHER THEORY), OR OTHERWISE) TO YOU OR ANY OTHER PERSON FOR COST OF COVER, RECOVERY, OR RECOUPMENT OF ANY INVESTMENT MADE BY YOU OR YOUR AFFILIATES IN CONNECTION WITH THIS AGREEMENT, OR FOR ANY LOSS OF PROFIT, REVENUE, BUSINESS, OR DATA OR PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF AMAZON HAS BEEN ADVISED OF THE POSSIBILITY OF THOSE COSTS OR DAMAGES. FURTHER, OUR AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED WILL NOT EXCEED AT ANY TIME THE TOTAL AMOUNTS DURING THE PRIOR SIX MONTH PERIOD PAID BY YOU TO AMAZON IN CONNECTION WITH THE PARTICULAR SERVICE GIVING RISE TO THE CLAIM.
We get it — Amazon is to be held harmless of all liabilities that arise due to third party sellers’ actions. At least, we hope everyone gets it by now.
Amazon is not going to help you when the rights owner catches you jumping on their trademarked listing. They aren’t going to handle your taxes or your product listing errors.
Sell at your own risk.