STATE OF NEW YORK
________________________________________________________________________
4375--A
2025-2026 Regular Sessions
IN SENATE
February 4, 2025
___________
Introduced by Sen. COMRIE -- read twice and ordered printed, and when
printed to be committed to the Committee on Consumer Protection --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the general business law, in relation to requiring
notice of mandatory arbitration clauses in certain consumer contracts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 399-c of the general business law, as added by
2 chapter 946 of the laws of 1984, is amended to read as follows:
3 § 399-c. Mandatory arbitration clauses in certain consumer contracts
4 [prohibited]. 1. Definitions.
5 a. The term "consumer" shall mean a natural person residing in this
6 state.
7 b. The term "consumer goods" shall mean goods, wares, paid merchandise
8 or services purchased or paid for by a consumer, the intended use or
9 benefit of which is intended for the personal, family or household
10 purposes of such consumer.
11 c. The term "mandatory arbitration clause" shall mean a term or
12 provision contained in a written contract for the sale or purchase of
13 consumer goods, which requires the parties to such contract to submit
14 any controversy thereafter arising under such contract to arbitration
15 prior to the commencement of any legal action to enforce the provisions
16 of such contract and which also further provides language to the effect
17 that the decision of the arbitrator or panel of arbitrators in its
18 application to the consumer party shall be final and not subject to
19 court review.
20 d. The term "arbitration" shall mean the use of a decision making
21 forum conducted by an arbitrator or panel of arbitrators within the
22 meaning and subject to the provisions of article seventy-five of the
23 civil practice law and rules.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05854-03-5
S. 4375--A 2
1 e. The term "representative" shall mean an employee or agent of a
2 company who is responsible for administering a contract for consumer
3 goods to a consumer.
4 2. a. Prohibition. No written contract for the sale or purchase of
5 consumer goods, entered into on or after the effective date of this
6 section, to which a consumer is a party, shall contain a mandatory arbi-
7 tration clause. Nothing contained herein shall be construed to prohibit
8 a non-consumer party from incorporating a provision within such contract
9 that such non-consumer party agrees that the decision of the arbitrator
10 or panel of arbitrators shall be final in its application to such non-
11 consumer party and not subject to court review.
12 b. Mandatory arbitration clause null and void. The provisions of a
13 mandatory arbitration clause shall be null and void. The inclusion of
14 such clause in a written contract for the sale or purchase of consumer
15 goods shall not serve to impair the enforceability of any other
16 provision of such contract.
17 3. In the event that a consumer is required to sign a contract for
18 consumer goods containing a mandatory arbitration clause the represen-
19 tative shall disclose the mandatory arbitration clause to the consumer
20 and clearly explain, in plain language, what an arbitration clause is.
21 If the consumer is agreeing to a contract by any form of contact that is
22 not personal, including but not limited to, electronically, using the
23 internet or through the mail, such contract shall have, at the end of
24 such contract, information informing the consumer that they are signing
25 a mandatory arbitration clause and an internet link to a valid and plain
26 written explanation of what an arbitration clause is.
27 § 2. This act shall take effect on the one hundred eightieth day after
28 it shall have become a law.
