Bill Text: NY A02608 | 2019-2020 | General Assembly | Introduced

New York Assembly Bill 2608 (Prior Session Legislation)

Introduced

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) 2020-07-17 - reported referred to rules [A02608 Detail]

Download: New_York-2019-A02608-Introduced.html

                STATE OF NEW YORK
        ________________________________________________________________________
                                          2608
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 24, 2019
                                       ___________
        Introduced by M. of A. DINOWITZ, WEINSTEIN, GALEF, WILLIAMS, M. G. MILL-
          ER,  COLTON, DICKENS, GOTTFRIED, D'URSO, SEAWRIGHT, JAFFEE, ZEBROWSKI,
          MOSLEY -- 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.
                                                                   LBD01200-01-9

        A. 2608                             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.