Bill S5206-2013

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

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

Details

Actions

  • Jan 8, 2014: REFERRED TO JUDICIARY
  • May 14, 2013: REFERRED TO JUDICIARY

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.


Text

STATE OF NEW YORK ________________________________________________________________________ 5206 2013-2014 Regular Sessions IN SENATE 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.

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