senate Bill S5206

Increases the monetary exclusion on the requirement of plain language in consumer contracts

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Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 14 / May / 2013
    • REFERRED TO JUDICIARY
  • 08 / Jan / 2014
    • REFERRED TO JUDICIARY

Summary

Increases the monetary exclusion on the requirement of plain language in consumer contracts.

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Bill Details

See Assembly Version of this Bill:
A7777
Versions:
S5206
Legislative Cycle:
2013-2014
Current Committee:
Senate Judiciary
Law Section:
General Obligations Law
Laws Affected:
Amd ยง5-702, Gen Ob L

Sponsor Memo

BILL NUMBER:S5206

TITLE OF BILL: An act to amend the general obligations law, in
relation to requirements for the use of plain language in consumer
transactions

PURPOSE OR GENERAL IDEA OF BILL:

Increases the applicability of the plain language law to consumer
contracts involving amounts up to $250,000

SUMMARY OF SPECIFIC PROVISIONS:

Section One amends the closing paragraph of subdivision a of section
5-702 of the general business law.

Section Two is the effective date.

JUSTIFICATION:

New York state first enacted the plain language law in 1977. The
statute requires "plain language" in certain written agreements to
which a consumer is a party, and where the subject money, property or
services are primarily used for personal, family, or household
purposes. A dollar threshold was placed on the definition of "consumer
contracts", making the statute only applicable to transactions valued
at less than $50,000. In 1977, the $50,000 threshold covered
essentially all consumer contracts. Today the $50,000 threshold may
riot even cover the cost of an automobile. This bill proposes to
increase the threshold to $250,000 in order to keep pace with the rate
of inflation.

Since the enactment of this statute, several states have followed New
York's lead and have adopted their own "plain language" statutes
(Connecticut in 1980, Pennsylvania in 1993, Florida in 2003, and
Minnesota in 1968). The state of California enacted their plain
language law in 1988.

PRIOR LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

One hundred eighty days after becoming law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5206

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 14, 2013
                               ___________

Introduced  by  Sen.  ZELDIN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the general obligations law, in relation to requirements
  for the use of plain language in consumer transactions

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. The closing paragraph of subdivision a of section 5-702 of
the general obligations law, as amended by chapter  1  of  the  laws  of
1994, is amended to read as follows:
  Any  creditor, seller or lessor who fails to comply with this subdivi-
sion shall be liable to a consumer who is a party to a written agreement
governed by this subdivision in an amount equal to  any  actual  damages
sustained plus a penalty of fifty dollars. The total class action penal-
ty  against  any  such  creditor,  seller or lessor shall not exceed ten
thousand dollars in any class action or series of class actions  arising
out  of  the  use  by a creditor, seller or lessor of an agreement which
fails to comply with this subdivision.  No action under this subdivision
may be brought after both parties to the agreement have fully  performed
their obligation under such agreement, nor shall any creditor, seller or
lessor  who  attempts  in  good faith to comply with this subdivision be
liable for such penalties. This subdivision shall not apply  to  a  good
faith  attempt  to describe the constant yield or other method of deter-
mining the lease charge and depreciation portions of  each  base  rental
payment  under  a lease of personal property. It also shall not apply to
agreements involving amounts in excess of  TWO  HUNDRED  fifty  thousand
dollars  nor  prohibit the use of words or phrases or forms of agreement
required by state or federal law, rule or regulation  or  by  a  govern-
mental instrumentality.
  S 2. This act shall take effect on the one hundred eightieth day after
it  shall have become a law and shall apply to any contract entered into
after such effective date.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10875-02-3

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