Bill Text: NJ A3365 | 2014-2015 | Regular Session | Introduced
Bill Title: Prohibits mandatory predispute arbitration provisions in consumer contracts.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2014-06-09 - Introduced, Referred to Assembly Consumer Affairs Committee [A3365 Detail]
Download: New_Jersey-2014-A3365-Introduced.html
Sponsored by:
Assemblyman PAUL D. MORIARTY
District 4 (Camden and Gloucester)
Assemblyman PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Co-Sponsored by:
Assemblyman Mainor
SYNOPSIS
Prohibits mandatory predispute arbitration provisions in consumer contracts.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning predispute arbitration agreements and amending P.L.1981, c.454.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1981, c.454 (C.56:12-16) is amended to read as follows:
3. No consumer contract, warranty, notice or sign, as provided for in this act, shall contain any provision by which the consumer waives his rights under this act. Notwithstanding the provisions of any other law to the contrary, no consumer contract, warranty, notice or sign shall contain any provision mandating predispute arbitration. Any such [provision] provisions shall be null and void. No consumer contract, notice or sign shall state that any of its provisions is or may be void, unenforceable or inapplicable in some jurisdictions without specifying which provisions are or are not void, unenforceable or inapplicable within the State of New Jersey; provided, however, that this shall not apply to warranties.
(cf: P.L.1981, c.454, s.3)
2. This act shall take effect immediately.
STATEMENT
This bill invalidates any provision in a consumer contract mandating predispute arbitration.
A predispute arbitration agreement is a clause in a contract that requires all disputes between parties to be handled through binding arbitration proceedings. By agreeing to the terms of a contract containing such a clause, the parties waive their rights to seek legal remedies in the civil court system. However, most consumer contracts are standardized forms drafted by businesses, which are offered on a take-it-or-leave-it basis. Consumers are typically not afforded any opportunity to negotiate terms. Consequently, they are often disadvantaged by predispute arbitration clauses that require them to waive the right to seek civil remedies through traditional litigation and to accept an arbitrator selected by the business.
