Legislation Assembly Democrats Paul Moriarty, Patrick Diegnan Jr. and Charles Mainor sponsored that would ban clauses in contracts that require consumers to forfeit the right to take a company to court was advanced by an Assembly panel on Thursday.
The bill (A-4097) would revise the “Truth-in-Consumer Contract, Warranty and Notice Act” to prohibit consumer contracts from forcing consumers to waive or limit certain rights. Clauses in consumer contracts increasingly include language forbidding consumers from suing a company in the event of a dispute and instead require private, less formal negotiation processes, which Moriarty noted tend to put the consumer at a disadvantage.
“Predatory forced arbitration clauses require consumers to relinquish rights or make it difficult for them to pursue litigation in cases of fraud or negligence, and the consumer often has no choice but to agree to the terms,” said Moriarty (D-Camden/Gloucester). “This measure simply represents a return to accountability for companies and peace of mind for consumers.”
“Unfortunately, many consumers – no matter how thoroughly they read a contract – may not even realize that they’re signing away their right to a jury trial or their right to bring a claim, because the deck is stacked against them,” said Diegnan (D-Middlesex). “This bill is about creating an even playing field for consumers in New Jersey and promoting transparency in business transactions.”
“Consumers have a right to certain protections, but some entities make a point of burying key details in the fine print and taking advantage of individuals without a legal background,” said Mainor (D-Hudson). “This legislation takes direct aim at unscrupulous practices and upholds the right of New Jersey consumers to seek redress for grievances.”
The bill would prohibit consumer contracts from containing provisions that require a consumer to waive or limit:
· any rights under the provisions of the Consumer Fraud Act, the New Jersey Lemon Law or any other federal or state consumer protection law;
· the right to contact a law enforcement agency, state or local government entity or any other entity for the purpose of reporting a consumer complaint;
· the right to bring a complaint or civil action within the six-year statute of limitations afforded under current law;
· the right to have the state of New Jersey serve as the forum, jurisdiction or venue for the resolution of any dispute;
· the right to bring a class action or serve as a class representative in any dispute;
· the right to discovery as provided by the New Jersey Rules of Court;
· the right to bring a claim for injury to person or property; or
· the right to a jury trial, except that a consumer may waive this right upon the advice of counsel, as evidenced by counsel’s signature on the contract.
The measure was advanced by the Assembly Consumer Affairs Committee, of which Moriarty is chair.