General Mills, whose portfolio of food products include Cheerios, has walked back a controversial change to its legal terms
NEW YORK (CNNMoney)
Last week, the company posted new legal terms to its website that some read as eliminating customers' right to sue the company.
General Mills (GIS, Fortune 500) explained the terms as requiring "all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration."
So on Saturday, the company noted outrage over the change and announced it was voiding those terms. But it stood by the decision and defended arbitration as cost-effective and common in the corporate world.
General Mills brands include popular cereals like Cheerios and Wheaties, baking products like Betty Crocker and Pillsbury, and other food lines like Progresso soups and Häagen-Dazs ice cream. The legal terms change was first reported by the New York Times.
Virtually every major company has legal terms or terms of service to which customers consent when they make a purchase or provide personal information. Some include an agreement that disputes and any damages be settled by an arbitrator, rather than a judge or jury. Consumer advocates say arbitration is generally business-friendly and eliminates customer protections like class-action lawsuits.
Related: Original Cheerios are GMO free, General Mills says
The controversy over the General Mills terms arose from a conception that it applied very broadly -- including interactions on social media where, for example, the company may provide coupons. If the customer accepted the coupon, he may agree to the terms without knowing it.
Before it canceled the terms, General Mills said that was a "mischaracterization."
"No one is precluded from suing us by purchasing our products at a store, and no one is precluded from suing us when they 'like' one of our Facebook pages," spokeswoman Kirstie Foster wrote in a blog post.
The company stood by that position when it changed course over the weekend.
"Those terms - and our intentions - were widely misread, causing concern among consumers," Foster wrote. "So we've reverted back to our prior terms. There's no mention of arbitration, and the arbitration provisions we had posted were never enforced. ...
"We'll just add that we never imagined this reaction," Foster continued. "We're sorry we even started down this path." 
First Published: April 20, 2014: 1:48 PM ET
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