What's happening
This bill requires clear notice and explanation of mandatory arbitration clauses in consumer goods, services, and employment contracts.
Why it matters
Increases transparency for consumers and employees. By requiring explicit notice and a plain-language explanation of arbitration clauses, the bill helps individuals better understand what rights they may be waiving before signing a contract.
Addresses digital and remote agreements. The law ensures that contracts signed electronically or by mail must also provide clear notice and easy-to-understand explanations, including an internet link to more information, closing a common loophole in how these clauses are disclosed.
Expands coverage to employment contracts. The changes clarify that not only consumer goods and services but also employment agreements are subject to these disclosure requirements, potentially impacting a broad range of workers across New York.
Promotes informed consent and potential legal recourse. By highlighting the presence and meaning of mandatory arbitration clauses, the bill empowers consumers and employees to make more informed decisions and recognize when they may be limiting their ability to resolve disputes in court.
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Who cares
Headline styles
Disclose Arbitration Clauses
Plain English, a few words. Used as the page title.
Sponsors
History
- Ordered to third reading cal.372
- Ordered to third reading rules cal.55
- Rules report cal.55
- Reported
- Reported referred to rules
- Reported referred to codes
- Referred to consumer affairs and protection
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
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 Assembly, do enact as follows:
Section 1. Section 399-c of the general business law, as added by chapter 946 of the laws of 1984, is amended to read as follows:
§ 399-c. Mandatory arbitration clauses in certain consumer contracts [prohibited]. 1. Definitions.
a. The term "consumer" shall mean a natural person residing in this state.
b. The term "consumer goods" shall mean goods, wares, paid merchandise or services purchased or paid for by a consumer, or employment, the intended use or benefit of which is intended for the personal, family or household purposes of such consumer.
c. The term "mandatory arbitration clause" shall mean a term or provision contained in a written contract for the sale or purchase of consumer goods or employment, which requires the parties to such contract to submit any controversy thereafter arising under such contract to arbitration prior to the commencement of any legal action to enforce the provisions of such contract and which also further provides language to the effect that the decision of the arbitrator or panel of arbitrators in its application to the consumer party shall be final and not subject to court review.
d. The term "arbitration" shall mean the use of a decision making forum conducted by an arbitrator or panel of arbitrators within the meaning and subject to the provisions of article seventy-five of the 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
e. The term "representative" shall mean an employee or agent of a company who is responsible for administering a contract for consumer goods, services, or employment to a consumer.
2. a. Prohibition. No written contract for the sale or purchase of consumer goods, entered into on or after the effective date of this section, to which a consumer is a party, shall contain a mandatory arbitration clause. Nothing contained herein shall be construed to prohibit a non-consumer party from incorporating a provision within such contract that such non-consumer party agrees that the decision of the arbitrator or panel of arbitrators shall be final in its application to such nonconsumer party and not subject to court review.
b. Mandatory arbitration clause null and void. The provisions of a mandatory arbitration clause shall be null and void. The inclusion of such clause in a written contract for the sale or purchase of consumer goods shall not serve to impair the enforceability of any other provision of such contract.
3. In the event that a consumer is required to sign a contract for consumer goods, services, or employment containing a mandatory arbitration clause the representative shall disclose the mandatory arbitration clause to the consumer and clearly explain, in plain language, what an arbitration clause is. If the consumer is agreeing to a contract by any form of contact that is not personal, including but not limited to, electronically, using the internet or through the mail, such contract shall have, at the end of such contract, information informing the consumer that they are signing a mandatory arbitration clause and an internet link to a valid and plain written explanation of what an arbitration clause is.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.