Bill > S04375

This bill amends the New York General Business Law to require mandatory disclosure and explanation of arbitration clauses in consumer contracts. Currently, the law prohibits mandatory arbitration clauses in consumer contracts, and this bill adds new provisions that, if a consumer is required to sign a contract with an arbitration clause, the representative must clearly explain what an arbitration clause is in plain language. For contracts signed electronically, through the 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 bill defines key terms like "consumer" (a natural person in New York), "consumer goods" (items purchased for personal or household use), and "arbitration" (a decision-making process outside of court). The bill aims to increase transparency by ensuring consumers understand the implications of arbitration clauses before agreeing to them, and it will take effect 180 days after becoming law. The legislation maintains the existing provision that arbitration clauses are null and void in consumer contracts, but does not invalidate other contract provisions.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S4375