S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2855
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 23, 2017
                                ___________
 
 Introduced  by M. of A. STECK -- read once and referred to the Committee
   on Consumer Affairs and Protection
 
 AN ACT to amend the general business law, in relation to  unconscionable
   terms in standard form contracts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The general business law is amended by adding a new section
 349-f to read as follows:
   § 349-F. UNCONSCIONABLE TERMS IN STANDARD FORM CONTRACTS.  1.    FIND-
 INGS.  THE  INCLUSION OF UNCONSCIONABLE TERMS IN STANDARD FORM CONTRACTS
 REGARDING DISPUTE RESOLUTION IS UNFAIR NOT ONLY  BECAUSE  ANY  RESULTING
 DISPUTE  RESOLUTION PROCEEDING IS UNFAIR TO THE PARTY FORCED TO AGREE TO
 THE UNCONSCIONABLE TERMS, BUT  ALSO  BECAUSE  THE  UNCONSCIONABLE  TERMS
 DISCOURAGE  VALID  CLAIMS.  FURTHERMORE,  WHEN  THE PROVISIONS ARE CHAL-
 LENGED, COURTS MAY SIMPLY STRIKE THE UNCONSCIONABLE  TERMS  BUT  ENFORCE
 THE  REMAINDER  OF  THE  AGREEMENT  REGARDING  DISPUTE  RESOLUTION. AS A
 RESULT, BUSINESSES HAVE LITTLE INCENTIVE NOT  TO  INCLUDE  THESE  TERMS.
 FURTHERMORE,  IT IS UNLIKELY THAT THERE IS ANY MEETING OF THE MINDS OVER
 A DISPUTE-RESOLUTION AGREEMENT THAT DOES NOT INCLUDE SEVERED UNCONSCION-
 ABLE TERMS.
   2.   DEFINITION. FOR THE PURPOSES  OF  THIS  SECTION,  "STANDARD  FORM
 CONTRACT" SHALL MEAN ANY CONTRACT TO WHICH ONLY ONE OF THE PARTIES IS AN
 INDIVIDUAL  AND THAT INDIVIDUAL DOES NOT DRAFT THE CONTRACT. IN ORDER TO
 BE A STANDARD FORM CONTRACT, THE DOCUMENT CONSTITUTING THE CONTRACT NEED
 NOT BE A PREPRINTED FORM NOR NEED IT CONTAIN LANGUAGE COMPLETELY IDENTI-
 CAL TO ANY OTHER CONTRACT.
   3. UNCONSCIONABLE TERMS. THERE IS A REBUTTABLE  PRESUMPTION  THAT  THE
 FOLLOWING   CONTRACTUAL  TERMS  ARE  SUBSTANTIVELY  UNCONSCIONABLE  WHEN
 INCLUDED IN A STANDARD FORM CONTRACT TO WHICH ONLY ONE OF THE PARTIES TO
 THE CONTRACT IS AN INDIVIDUAL AND THAT INDIVIDUAL  DOES  NOT  DRAFT  THE
 CONTRACT:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD07681-01-7

 A. 2855                             2
 
   (A)  A  REQUIREMENT  THAT RESOLUTION OF LEGAL CLAIMS TAKES PLACE IN AN
 INCONVENIENT VENUE. AN "INCONVENIENT VENUE" IS, FOR  PURPOSES  OF  STATE
 LAW  CLAIMS,  A PLACE OTHER THAN THE COUNTY WHERE THE INDIVIDUAL RESIDES
 OR THE CONTRACT WAS CONSUMMATED, AND FOR PURPOSES OF FEDERAL LAW CLAIMS,
 A  PLACE  OTHER  THAN THE FEDERAL JUDICIAL DISTRICT WHERE THE INDIVIDUAL
 RESIDES OR THE CONTRACT WAS CONSUMMATED;
   (B) A WAIVER OF THE INDIVIDUAL'S RIGHT TO ASSERT CLAIMS OR SEEK  REME-
 DIES PROVIDED BY STATE OR FEDERAL STATUTE;
   (C)  A  WAIVER  OF  THE INDIVIDUAL'S RIGHT TO SEEK PUNITIVE DAMAGES AS
 PROVIDED BY LAW;
   (D) A REQUIREMENT THAT THE INDIVIDUAL BRING AN  ACTION  PRIOR  TO  THE
 EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS;
   (E)  A  REQUIREMENT  THAT THE INDIVIDUAL PAY FEES AND COSTS TO BRING A
 LEGAL CLAIM SUBSTANTIALLY IN EXCESS OF THE  FEES  AND  COSTS  THAT  THIS
 STATE'S  COURTS  REQUIRE TO BRING SUCH A STATE LAW CLAIM OR THAT FEDERAL
 COURTS REQUIRE TO BRING SUCH A FEDERAL LAW CLAIM; AND
   (F) THE CONTRACT DOES NOT ADVISE THE INDIVIDUAL THAT  IT  IS  A  LEGAL
 DOCUMENT,  THAT THE INDIVIDUAL SHOULD CONSULT WITH COUNSEL OF HIS OR HER
 CHOOSING CONCERNING THE MEANING OF ITS TERMS,  AND  DOES  NOT  GIVE  THE
 INDIVIDUAL  A REASONABLE TIME IN WHICH TO REVIEW THE CONTACT WITH HIS OR
 HER COUNSEL.
   4. RELATION TO COMMON LAW AND THE UNIFORM COMMERCIAL CODE.  IN  DETER-
 MINING  WHETHER THE TERMS DESCRIBED IN SUBDIVISION THREE OF THIS SECTION
 ARE UNENFORCEABLE, A COURT SHALL CONSIDER THE PRINCIPLES  THAT  NORMALLY
 GUIDE  COURTS  IN THIS STATE IN DETERMINING WHETHER UNCONSCIONABLE TERMS
 ARE ENFORCEABLE. ADDITIONALLY, THE COMMON LAW AND THE UNIFORM COMMERCIAL
 CODE SHALL GUIDE COURTS IN  DETERMINING  THE  ENFORCEABILITY  OF  UNFAIR
 TERMS NOT SPECIFICALLY IDENTIFIED IN SUCH SUBDIVISION.
   5.  SEVERABILITY.  THERE  IS A REBUTTABLE PRESUMPTION THAT A TERM IN A
 STANDARD FORM CONTRACT THAT IS FOUND TO BE UNCONSCIONABLE IS NOT SEVERA-
 BLE FROM THE AGREEMENT IN WHICH IT IS SITUATED. IN  DETERMINING  WHETHER
 THIS  PRESUMPTION HAS BEEN REBUTTED COURTS SHOULD CONSIDER GENERAL STATE
 LAW PRINCIPLES REGARDING THE SEVERABILITY OF UNENFORCEABLE TERMS.
   6. UNFAIR AND DECEPTIVE ACT AND PRACTICE. IT IS AN UNFAIR  AND  DECEP-
 TIVE  PRACTICE  IN VIOLATION OF SECTION THREE HUNDRED FORTY-NINE OF THIS
 ARTICLE TO INCLUDE ONE OF THE PRESUMPTIVELY-UNCONSCIONABLE TERMS IDENTI-
 FIED IN SUBDIVISION THREE OF THIS SECTION IN A STANDARD FORM CONTRACT TO
 WHICH ONLY ONE OF THE PARTIES TO THE CONTRACT IS AN INDIVIDUAL AND  THAT
 INDIVIDUAL  DOES  NOT  DRAFT  THE  CONTRACT.   NOTWITHSTANDING ANY OTHER
 PROVISION OF LAW TO THE CONTRARY, A PARTY WHO PREVAILS IN A CLAIM  UNDER
 THIS  SECTION  SHALL  BE  ENTITLED  TO ONE THOUSAND DOLLARS IN STATUTORY
 DAMAGES PER VIOLATION. ADDITIONALLY, SUCH AN ACTION MAY BE MAINTAINED BY
 AN EMPLOYEE AGAINST HIS OR HER EMPLOYER WHETHER OR  NOT  THE  LABOR  LAW
 OTHERWISE ALLOWS FOR SUCH CLAIMS.
   §  2. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law,  and  shall  apply  to
 contracts entered into on or after such date.