AB 2365, as amended, John A. Pérez. Contracts: unlawful contracts.
Existing law generally regulates formation and enforcement of contracts, including what constitutes an unlawful contract. Under existing law a contract is unlawful if it is contrary to an express provision of law, contrary to the policy of express law, though not expressly prohibited, or otherwise contrary to good morals.
This bill would declare a contract or proposed contract for the sale or lease of consumer goods or services unlawful if it contains a provision requiring the consumer to waive his or her right to make any statement regarding the consumer’s experience with a seller or lessor or its employees or agents, unless the waiver was knowing, voluntary, and intelligent, as specified. The bill would make it unlawful to threaten orbegin insert toend insert seek to enforce, a provision made unlawful under the bill, or to otherwise penalize a consumer for making any statement regarding the consumer’s experience with a seller or lessor, or its employees or agent, absent the consumer’s knowing, voluntary, and intelligent waiver of his or her right to do so. The bill would impose civil penalties upon any person who violates the provisions of the bill, of $2,500 for the initial violation and $5,000 for each subsequent violation, as well as an additional penalty of $10,000 if the violation was willful, intentional, or reckless. The bill would authorize the consumer, the Attorney General, or a district attorney or city attorney to bring a civil action for a violation of the provisions of the bill. The bill would provide that the penalty set forth in the bill is not an exclusive remedy, and does not affect any other relief or remedy provided by law.begin insert The bill would not limit any authority otherwise provided by law of a person or business to remove an online consumer statement that is libelous, harassing, obscene, vulgar, or sexually explicit, contains the personal information or likeness of a person other than the consumer, or violates a person’s civil right to be treated equal to all others no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.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 1670.8 is added to the Civil Code, to
2read:
(a) (1) A contract or proposed contract for the sale or
4lease of consumer goods or services is unlawful if it includes a
5provision requiring the consumer to waive his or her right to make
6any statement regarding the consumer’s experience with the
seller
7or lessor or its employees or agents, unless the waiver of this right
8was knowing, voluntary, and intelligent.
9(2) It shall be unlawful to threaten orbegin insert toend insert seek to enforce a
10provision made unlawful under this section, or to otherwise
11penalize a consumer for making any statement regarding the
12consumer’s experience with a seller or lessor, or its employees or
13agent, unless the consumer has knowingly, voluntarily, and
14intelligently waived his or her right to do so.
15(b) The party that drafted the waiver provision has the burden
16of proving that the waiver was knowing, voluntary, and intelligent.
17(c) Any
waiver of the provisions of this section is contrary to
18public policy, and is void and unenforceable.
19(d) Any person who violates this section shall be subject to a
20civil penalty not to exceed two thousand five hundred dollars
21($2,500) for the first violation, and five thousand dollars ($5,000)
22for the second and for each subsequent violation, to be assessed
P3 1and collected in a civil action brought by the consumer, by the
2Attorney General, or by the district attorney or city attorney of the
3county or city in which the violation occurred. When collected,
4the civil penalty shall be payable, as appropriate, to the consumer
5or to the general fund of whichever governmental entity brought
6the action to assess the civil penalty.
7(e) In addition, for a willful, intentional, or
reckless violation
8of this section, a consumer or public prosecutor may recover a
9civil penalty not to exceed ten thousand dollars ($10,000).
10(f) The penalty provided by this section is not an exclusive
11remedy, and does not affect any other relief or remedy provided
12by law.begin insert This section shall not be construed to limit any authority
13otherwise provided by law of a person or business to remove an
14online consumer statement that is libelous, harassing, obscene,
15vulgar, or sexually explicit, contains the personal information or
16likeness of a person other than the consumer, or violates Section
1751.end insert
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