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.

Statutes affected:
S687: 399-c general business law