Bill > A03369

This bill amends the New York General Business Law to address mandatory arbitration clauses in consumer contracts by introducing new requirements for disclosure and explanation. The bill first defines key terms such as "consumer" (a natural person in New York), "consumer goods" (items purchased for personal or household use), and "mandatory arbitration clause" (a contract provision requiring disputes to be resolved through arbitration before legal action). The legislation prohibits mandatory arbitration clauses in written contracts for consumer goods and declares such clauses null and void. Most significantly, the bill now requires that when a consumer is asked to sign a contract with a mandatory arbitration clause, the representative must disclose and clearly explain the clause in plain language. For contracts signed electronically, via internet, or by mail, the contract must include information about the mandatory arbitration clause and provide an internet link to a clear explanation of what an arbitration clause means. The goal appears to be increasing consumer understanding and transparency about contractual agreements that limit their ability to pursue legal action in courts. The bill will take effect 180 days after becoming law, giving businesses time to adjust their contract practices.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/A3369