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This entry was published on 2014-09-22
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SECTION 399-C
Mandatory arbitration clauses in certain consumer contracts prohibited
General Business (GBS) CHAPTER 20, ARTICLE 26
§ 399-c. Mandatory arbitration clauses in certain consumer contracts
prohibited. 1. Definitions.

a. The term "consumer" shall mean a natural person residing in this
state.

b. The term "consumer goods" shall mean goods, wares, paid merchandise
or services purchased or paid for by a consumer, the intended use or
benefit of which is intended for the personal, family or household
purposes of such consumer.

c. The term "mandatory arbitration clause" shall mean a term or
provision contained in a written contract for the sale or purchase of
consumer goods which requires the parties to such contract to submit any
controversy thereafter arising under such contract to arbitration prior
to the commencement of any legal action to enforce the provisions of
such contract and which also further provides language to the effect
that the decision of the arbitrator or panel of arbitrators in its
application to the consumer party shall be final and not subject to
court review.

d. The term "arbitration" shall mean the use of a decision making
forum conducted by an arbitrator or panel of arbitrators within the
meaning and subject to the provisions of article seventy-five of the
civil practice law and rules.

2. a. Prohibition. No written contract for the sale or purchase of
consumer goods, entered into on or after the effective date of this
section, to which a consumer is a party, shall contain a mandatory
arbitration clause. Nothing contained herein shall be construed to
prohibit a non-consumer party from incorporating a provision within such
contract that such non-consumer party agrees that the decision of the
arbitrator or panel of arbitrators shall be final in its application to
such non-consumer party and not subject to court review.

b. Mandatory arbitration clause null and void. The provisions of a
mandatory arbitration clause shall be null and void. The inclusion of
such clause in a written contract for the sale or purchase of consumer
goods shall not serve to impair the enforceability of any other
provision of such contract.