SB 1241, as amended, Wieckowski. Contracts.
Existing law, the Consumer Contract Awareness Act of 1990, 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 wouldbegin delete provide,end deletebegin insert prohibit,end insert for contracts entered into, modified, or extended on or after January 1, 2017,begin delete 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.end deletebegin insert a seller from requiring a consumer, as a condition of entering into a contract, to agree to a provision that would require the consumer to adjudicate outside of California a claim arising in California or deprive the consumer of the protection of California law with respect to a controversy
arising in California. The bill would make any choice of venue or choice of law provision voidable, upon request of the consumer, if the provision would violate either of those prohibitions as provided.end insert
The bill wouldbegin delete specify thatend deletebegin insert makeend insert injunctive reliefbegin delete isend delete availablebegin delete in this context and that a court mayend deletebegin insert and would authorize a court toend insert award abegin delete plaintiffend deletebegin insert consumerend insert reasonable attorney’s fees. The bill wouldbegin delete include arbitration with litigationend deletebegin insert
provide that adjudication includes litigation and arbitrationend insert 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. The bill would except from thesebegin insert employmentend insert provisions a contract with an employee who is represented by legal counsel, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 1799.208 is added to the end insertbegin insertCivil Codeend insertbegin insert, to
2read:end insert
(a) A seller shall not require a consumer, as a
4condition of entering into a contract, to agree to a provision that
5would do either of the following:
6
(1) Require the consumer to adjudicate outside of California a
7claim arising in California.
8
(2) Deprive the consumer of the protection of California law
9with respect to a controversy arising in California.
10
(b) Any choice of venue or choice of law provision is voidable,
11upon request of the consumer, if the provision would do either of
12the following:
13
(1) Require the consumer to adjudicate outside of
California a
14claim arising in California.
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(2) Deprive the consumer of the protection of California law
2with respect to a controversy arising in California.
3
(c) If a provision is rendered void at the request of the consumer,
4as described in subdivision (b), the matter shall be adjudicated in
5California and California law shall govern the dispute.
6
(d) In addition to injunctive relief and any other remedies
7available, a court may award a consumer who is enforcing his or
8her rights under this section reasonable attorney’s fees.
9
(e) For purposes of this section, adjudication includes litigation
10and arbitration.
11
(f) This section shall apply to a contract entered into, modified,
12or extended on or
after January 1, 2017.
begin insertSection 925 is added to the end insertbegin insertLabor Codeend insertbegin insert, to read:end insert
begin insert(a) An employer shall not require an employee or job
15applicant, as a condition of employment, to agree to a provision
16that would do either of the following:
17
(1) Require the employee to adjudicate outside of California a
18claim arising in California.
19
(2) Deprive the employee of the protection of California law
20with respect to a controversy arising in California.
21
(b) Any choice of venue or choice of law provision is voidable,
22upon request of the employee, if the provision would do either of
23the following:
24
(1) Require the employee to adjudicate outside of
California a
25claim arising in California.
26
(2) Deprive the employee of the protection of California law
27with respect to a controversy arising in California.
28
(c) If a provision is rendered void at the request of the employee,
29as described in subdivision (b), the matter shall be adjudicated in
30California and California law shall govern the dispute.
31
(d) In addition to injunctive relief and any other remedies
32available, a court may award an employee who is enforcing his
33or her rights under this section reasonable attorney’s fees.
34
(e) For purposes of this section, adjudication includes litigation
35and arbitration.
36
(f) This section shall not apply to a contract with an employee
37who is in fact
individually represented by legal counsel in
38negotiating the terms of an agreement to designate either the venue
39or forum in which a controversy arising from the employment
40contract may be adjudicated or the choice of law to be applied.
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(g) This section shall apply to a contract entered into, modified,
2or extended on or after January 1, 2017.
Section 1799.208 is added to the Civil Code, to
4read:
(a) Notwithstanding any other law, a provision in
6a consumer contract that purports to designate the venue in which
7a controversy arising from the consumer contract may be litigated,
8or the choice of law to be applied, is voidable by the consumer if
9the provision would do either of the following:
10(1) Deprive the consumer of the protection of California law
11with respect to a controversy arising in California.
12(2) Require the consumer to litigate outside of California a claim
13arising in California.
14(b) A seller shall not require a consumer to agree
to a provision
15as described in subdivision (a) as a condition of entering into a
16contract regulated by this title, and if such a provision is required,
17it shall be inoperative and California law shall apply in its place.
18(c) In addition to injunctive relief and any other remedies
19available, a court may award a plaintiff who is enforcing his or
20her rights under this section reasonable attorney’s fees.
21(d) For purposes of this section, litigation includes arbitration.
22(e) This section shall apply to a contract entered into, modified,
23or 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
26employment contract that purports to designate the venue in which
27a controversy arising from the employment contract may be
28litigated, or the choice of law to be applied, is voidable by the
29employee if the provision would do either of the following:
30(1) Deprive the employee of the protection of California law
31with respect to a controversy arising in California.
32(2) Require the employee to litigate outside of California a claim
33arising in California.
34(b) An employer shall not require a person to agree
to a
35provision as described in subdivision (a) as a condition of entering
36into an employment contract, and if such a provision is required,
37it shall be inoperative and California law shall apply in its place.
38(c) In addition to injunctive relief and any other remedies
39available, a court may award a plaintiff who is enforcing his or
40her rights under this section reasonable attorney’s fees.
P5 1(d) For purposes of this section, litigation includes arbitration.
2(e) This section shall not apply to a contract with an employee
3who is individually represented by legal counsel in negotiating the
4terms of an agreement to designate the venue in which a
5controversy arising from the employment
contract may be litigated
6or the choice of law to be applied.
7(f) This section shall apply to a contract entered into, modified,
8or extended on or after January 1, 2017.
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