This bill amends existing law regarding the validity of arbitration agreements, specifically targeting those between consumers and business entities. It introduces a new provision stating that an arbitration agreement will not be valid if it is applied to a dispute that is unrelated to the terms of the contract and would otherwise be invalidated by general contract defenses recognized by law or equity. This change aims to protect consumers from being bound by arbitration agreements in situations that do not pertain to the original contractual relationship.

The bill will take effect 90 days after its enactment and will apply to all arbitration agreements that are issued, executed, or renewed after that date. By invalidating certain arbitration agreements, the legislation seeks to ensure that consumers are not unfairly compelled to arbitrate disputes that fall outside the scope of their original agreements with business entities.

Statutes affected:
Introduced: 2A:23B-6