NY State Senate Bill 2023-S687

Senate Bill S687

2023-2024 Legislative Session

Relates to requiring mandatory arbitration clauses in certain consumer contracts to be printed in large font type

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Current Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to consumer protection
Jan 06, 2023	referred to consumer protection

co-Sponsors

2023-S687 (ACTIVE) - Details

See Assembly Version of this Bill:: A2080
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §399-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2015-2016: A9544
2017-2018: S7111, A5246
2019-2020: S2780, A2497
2021-2022: S2747, A1865

2023-S687 (ACTIVE) - Summary

Requires mandatory arbitration clauses in certain consumer contracts to be printed in large font type.

2023-S687 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S687

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the general business law, in relation to requiring
mandatory arbitration clauses in certain consumer contracts to be print-
ed in large font type

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to require that when a company issues a
contract that contains a mandatory to a consumer for signature, that the
arbitration clause be in a large font.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 399-c of the General Business Law as follows:
Subdivision 1: Adds "large print format" to the definitions listed in §
399-c of the General Business Law Subdivision 3: Specifies that each
initial contract for goods or services provided by a company to a
consumer, which contains an arbitration clause, will display the arbi-

tration clause in a large print format. Subdivision 4: Sets a first
offense penalty of $250 and a maximum penalty thereafter at $500 for
violation of subdivision 3 of this section. Section 2 is the effective
date.

 
JUSTIFICATION:

There are many instances of consumers signing a contract for a good or
service containing a mandatory and in many cases non-negotiable arbi-
tration clause. These clauses take away the right of a consumer to
dispute a claim in a court of law and instead move any dispute with the
business to an arbitration proceeding. In many cases these mandatory
arbitration clauses are buried in the fine print of contracts and go
unnoticed by the average consumer. Presently, laws regulating arbi-
tration clauses in contracts are limited in the State of New York. It is
important that consumers be made aware of the effects of signing an
arbitration clause. This legislation is intended to ensure that all New
Yorkers are capable of making informed decisions regarding how they will
be able to dispute a claim when signing contracts for goods and
services.

 
PRIOR LEGISLATIVE HISTORY:

2022: S2747- Referred to consumer protection

2019-20 - A.2497 - Third Reading Calendar / S.2780 - Referred to Consum-
er Protection

2017-18:.A.5246 - Third Reading Calendar / S.7111 - Referred to Consumer
Protection

2015-16: A.9544 - Passed Assembly

 
FISCAL IMPLICATIONS:

None to the State

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall become law.

2023-S687 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    687
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 6, 2023
                                ___________
 
 Introduced by Sens. COMRIE, SEPULVEDA -- read twice and ordered printed,
   and  when  printed  to  be  committed  to  the  Committee  on Consumer
   Protection
 
 AN ACT to amend the general  business  law,  in  relation  to  requiring
   mandatory  arbitration  clauses  in  certain  consumer contracts to be
   printed in large font type

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, 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,  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 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.
                                                            LBD00735-01-3

 S. 687                              2
 
   E. THE TERM "LARGE PRINT FORMAT" SHALL MEAN A  PRINTED  FONT  SIZE  OF
 SIXTEEN POINTS OR LARGER.
   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 arbi-
 tration 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  non-
 consumer 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.  LARGE PRINT ARBITRATION CLAUSES IN CONTRACTS. EACH AND EVERY BUSI-
 NESS SHALL, IN EACH  INITIAL  CONTRACT  FOR  GOODS  OR  SERVICES,  WHICH
 CONTAINS  AN  ARBITRATION CLAUSE PROVIDE THE CONSUMER WITH A COPY OF THE
 CONTRACT IN WHICH THE ARBITRATION CLAUSE IS  DISPLAYED  IN  LARGE  PRINT
 FORMAT.
   4.  A VIOLATION BY ANY PERSON OR BUSINESS OF SUBDIVISION THREE OF THIS
 SECTION, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH  OFFENSE  BY  SUCH
 PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED FIFTY
 DOLLARS.  A  SECOND  OFFENSE  AND  ANY  OFFENSE  COMMITTED THEREAFTER IS
 PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
   § 2. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

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Senate Bill S687

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Sponsored By

Leroy Comrie