SB 1241, as amended, Wieckowski. Contracts.
Existing law, the Consumer Contract Awarenessbegin delete Act,end deletebegin insert Act of 1990,end insert defines a consumer contract as a writing prepared by a seller that provides for the sale or lease of goods or services or the extension of credit, as specified, for personal, family, or household purposes, among other provisions. The act requires a seller, which includes financial institutions, to deliver a copy of a consumer contract to the consumer at the time the contract is signed, and it prohibits the waiver of any provisions of the act.
This bill would provide, for contracts entered into, modified, or extended on or after January 1, 2017, that a provision in a consumer contract that purports to designate the venue in which a controversy arising from the consumer contract is litigated, or the choice of law to be applied, is voidable by the consumer, with respect to a controversy arising in California, if the provision would deprive the consumer of the protection of California law or require the consumer to litigate the controversy out of state. The bill would prohibit a seller from requiring a consumer to agree to these voidable provisions as a condition of entering into a contract regulated by the act, and would provide that such provisions, if required, are inoperative and California law applies in its place. The bill would specify that injunctive relief is available in this context and that a court may award a plaintiff reasonable attorney’s fees. The bill would include arbitration with litigation for purposes of these provisions.
This bill also would create an analogous set of rights, prohibitions, and requirements, as described above, in connection with employment contracts.begin insert The bill would except from these provisions a contract with an employee who is represented by legal counsel, as specified.end insert
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1799.208 is added to the Civil Code, to
2read:
(a) Notwithstanding any other law, a provision in
4a consumer contract that purports to designate the venue in which
5a controversy arising from the consumer contract may be litigated,
6or the choice of law to be applied, is voidable by the consumer if
7the provision would do either of the following:
8(1) Deprive the consumer of the protection of California law
9with respect to a controversy arising in California.
10(2) Require the consumer to litigate outside of California a claim
11arising in California.
12(b) A seller shall not require a consumer to agree
to a provision
13as described in subdivision (a) as a condition of entering into a
14contract regulated by this title, and if such a provision is required,
15it shall be inoperative and California law shall apply in its place.
16(c) In addition to injunctive relief and any other remedies
17available, a court may award a plaintiff who is enforcing his or
18her rights under this section reasonable attorney’s fees.
19(d) For purposes of this section, litigation includes arbitration.
20(e) This section shall apply to a contract entered into, modified,
21or extended on or after January 1, 2017.
Section 925 is added to the Labor Code, to read:
(a) Notwithstanding any other law, a provision in an
24employment contract that purports to designate the venue in which
25a controversy arising from the employment contract may be
P3 1litigated, or the choice of law to be applied, is voidable by the
2employee if the provision would do either of the following:
3(1) Deprive the employee of the protection of California law
4with respect to a controversy arising in California.
5(2) Require the employee to litigate outside of California a claim
6arising in California.
7(b) An employer shall not require a person to agree
to a
8provision as described in subdivision (a) as a condition of entering
9into an employment contract, and if such a provision is required,
10it shall be inoperative and California law shall apply in its place.
11(c) In addition to injunctive relief and any other remedies
12available, a court may award a plaintiff who is enforcing his or
13her rights under this section reasonable attorney’s fees.
14(d) For purposes of this section, litigation includes arbitration.
begin insert
15
(e) This section shall not apply to a contract with an employee
16who is individually represented by legal counsel in negotiating
17the terms of an agreement to designate the venue in which a
18controversy arising from the employment
contract may be litigated
19or the choice of law to be applied.
20(e)
end delete
21begin insert(f)end insert This section shall apply to a contract entered into, modified,
22or extended on or after January 1, 2017.
O
96