Bill Text: NY A05248 | 2017-2018 | General Assembly | Introduced

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Bill Title: Requires mandatory arbitration clauses in certain consumer contracts to be disclosed and explained to the consumer.

Spectrum: Partisan Bill (Democrat 14-0)

Status: (Introduced - Dead) 2018-01-03 - ordered to third reading cal.372 [A05248 Detail]

Download: New_York-2017-A05248-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          5248
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                    February 7, 2017
                                       ___________
        Introduced  by  M. of A. DINOWITZ, WEINSTEIN, SEPULVEDA -- read once and
          referred to the Committee on Consumer Affairs and Protection
        AN ACT to amend the general  business  law,  in  relation  to  requiring
          notice of mandatory arbitration clauses in certain consumer contracts
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Section 399-c of the general  business  law,  as  added  by
     2  chapter 946 of the laws of 1984, is amended to read as follows:
     3    §  399-c.  Mandatory arbitration clauses in certain consumer contracts
     4  [prohibited]. 1. Definitions.
     5    a. The term "consumer" shall mean a natural person  residing  in  this
     6  state.
     7    b. The term "consumer goods" shall mean goods, wares, paid merchandise
     8  or  services  purchased  or  paid  for by a consumer, or employment, the
     9  intended use or benefit of which is intended for the personal, family or
    10  household purposes of such consumer.
    11    c. The term "mandatory  arbitration  clause"  shall  mean  a  term  or
    12  provision  contained  in  a written contract for the sale or purchase of
    13  consumer goods  or  employment,  which  requires  the  parties  to  such
    14  contract  to  submit  any  controversy  thereafter  arising  under  such
    15  contract to arbitration prior to the commencement of any legal action to
    16  enforce the provisions of such contract and which also further  provides
    17  language  to  the effect that the decision of the arbitrator or panel of
    18  arbitrators in its application to the consumer party shall be final  and
    19  not subject to court review.
    20    d.  The  term  "arbitration"  shall  mean the use of a decision making
    21  forum conducted by an arbitrator or  panel  of  arbitrators  within  the
    22  meaning  and  subject  to  the provisions of article seventy-five of the
    23  civil practice law and rules.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03790-01-7
        A. 5248                             2
     1    e. The term "representative" shall mean an  employee  or  agent  of  a
     2  company  who  is  responsible  for administering a contract for consumer
     3  goods, services, or employment to a consumer.
     4    2.  a.  Prohibition.  No  written contract for the sale or purchase of
     5  consumer goods, entered into on or after  the  effective  date  of  this
     6  section, to which a consumer is a party, shall contain a mandatory arbi-
     7  tration  clause. Nothing contained herein shall be construed to prohibit
     8  a non-consumer party from incorporating a provision within such contract
     9  that such non-consumer party agrees that the decision of the  arbitrator
    10  or  panel  of arbitrators shall be final in its application to such non-
    11  consumer party and not subject to court review.
    12    b. Mandatory arbitration clause null and void.  The  provisions  of  a
    13  mandatory  arbitration  clause  shall be null and void. The inclusion of
    14  such clause in a written contract for the sale or purchase  of  consumer
    15  goods  shall  not  serve  to  impair  the  enforceability  of  any other
    16  provision of such contract.
    17    3. In the event that a consumer is required to  sign  a  contract  for
    18  consumer  goods,  services,  or  employment containing a mandatory arbi-
    19  tration clause the representative shall  disclose  the  mandatory  arbi-
    20  tration  clause  to the consumer and clearly explain, in plain language,
    21  what an arbitration clause is. If the consumer is agreeing to a contract
    22  by any form of contact that is not personal, including but  not  limited
    23  to,  electronically,  using  the  internet  or  through  the  mail, such
    24  contract shall have, at the end of such contract, information  informing
    25  the consumer that they are signing a mandatory arbitration clause and an
    26  internet  link to a valid and plain written explanation of what an arbi-
    27  tration clause is.
    28    § 2. This act shall take effect on the one hundred eightieth day after
    29  it shall have become a law.