Bill Text: NJ S4072 | 2024-2025 | Regular Session | Introduced
Bill Title: Invalidates certain arbitration agreements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-30 - Introduced in the Senate, Referred to Senate Commerce Committee [S4072 Detail]
Download: New_Jersey-2024-S4072-Introduced.html
Sponsored by:
Senator NICHOLAS P. SCUTARI
District 22 (Somerset and Union)
SYNOPSIS
Invalidates certain arbitration agreements.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain arbitration agreements and amending P.L.2003, c.95.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 6 of P.L.2003, c.95 (C.2A:23B-6) is amended to read as follows:
6. Validity of Agreement to Arbitrate.
a. An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.
b. The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.
c. An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.
d. If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.
e. An agreement to submit to arbitration contained in a contractual relationship consented to by a consumer and a business entity, shall not be valid if the business entity or consumer seeks to apply the agreement to a dispute that is unrelated to the terms of the contract and would otherwise be invalidated by generally applicable contract defenses found at law or in equity if applied.
(cf: P.L.2003, c.95, s.6)
2. This act shall take effect on the 90th day next following the date of enactment and shall apply to agreements to arbitrate issued, executed, or renewed on or after that date.
STATEMENT
This bill invalidates the enforcement of certain arbitration agreements.
Specifically, the bill provides that an agreement to submit to arbitration, contained in a contractual relationship consented to by a consumer and a business entity, will not be valid if the business entity or consumer seeks to apply the agreement to a dispute that is unrelated to the terms of the contract and would be invalidated by generally applicable contract defenses found at law or in equity if applied.
