S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3319
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 22, 2021
                                ___________
 
 Introduced  by  M.  of A. STECK -- Multi-Sponsored by -- M. of A. ENGLE-
   BRIGHT, SEAWRIGHT, WILLIAMS, ZEBROWSKI -- 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-g to read as follows:
   §  349-G.  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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04107-01-1
              

 A. 3319                             2
 
 THE  CONTRACT  IS  AN  INDIVIDUAL AND THAT INDIVIDUAL DOES NOT DRAFT THE
 CONTRACT:
   (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.