Defines certain terms in standard form contracts as unconscionable.
Summary
This bill would add a new section to the General Business Law declaring certain terms in standard form contracts to be presumptively unconscionable when a contract is drafted by one party and signed by an individual who did not draft it. The bill targets dispute-resolution provisions that can make it harder for consumers or workers to bring claims, including inconvenient venue requirements, waivers of statutory remedies, waivers of punitive damages, shortened limitations periods, excessive filing fees and costs, and failure to warn the individual that the document is a legal contract and that counsel should be consulted. It also creates a rebuttable presumption that such unconscionable terms are not severable from the rest of the agreement.
The bill further states that including one of these presumptively unconscionable terms in a covered standard form contract is an unfair and deceptive act or practice under General Business Law section 349. A prevailing plaintiff would be entitled to $1,000 in statutory damages per violation, and the bill expressly allows employees to bring such claims against employers even where labor law might otherwise limit those claims. The bill applies prospectively to contracts entered into on or after its effective date.
Impact
If enacted, the bill would expand New York consumer-protection law and contract-law scrutiny of adhesion contracts, especially arbitration and other dispute-resolution clauses in consumer and employment settings. It would give courts a statutory basis to treat specified contract terms as unconscionable, make severability harder for businesses to rely on when such terms are struck, and create a private right of action with statutory damages under General Business Law section 349. The measure would affect businesses that use standard form contracts, as well as consumers and employees who sign them, by increasing the risk that certain boilerplate terms will be unenforceable and by encouraging more litigation over contract fairness.
Sentiment
Based on the bill text and the absence of recorded committee debate or votes, the apparent sentiment is strongly consumer- and worker-protective. The findings section reflects a clear policy judgment that businesses have incentives to include unfair dispute-resolution terms and that those terms discourage valid claims. The bill’s structure suggests support for limiting overreaching boilerplate and improving access to remedies, with no recorded opposition or amendments in the provided materials.
Contention
The main points of contention are likely to be the bill’s treatment of dispute-resolution clauses, especially venue restrictions, fee-shifting or cost provisions, shortened limitations periods, and waivers of statutory or punitive remedies. Businesses and contract drafters may object that the bill interferes with freedom of contract, increases litigation exposure, and could invalidate entire agreements rather than just offending clauses because of the nonseverability presumption. Supporters would likely emphasize that the bill addresses unequal bargaining power in consumer and employment contracts and prevents hidden terms from undermining legal rights.
Prohibiting certain conduct and improper collection of veterans benefits fees and requiring mandatory counseling concerning the benefits claims process.
Prohibiting certain conduct and improper collection of veterans benefits fees and requiring mandatory counseling concerning the benefit claims process.