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Assembly panel passes bill prohibiting companies from requiring contract disputes be settled out-of-state

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A bill banning terms and conditions in consumer contracts that require disputes to be settled somewhere outside of New Jersey was advanced by an Assembly panel this morning.

The bill, which is sponsored by four Assembly Democrats, was released with a 3-1 vote by the Assembly Consumer Affairs Committee. Sponsors claim prohibiting requirements found in consumer contracts that disputes be settled out-of-state will help to level the playing field between consumers and businesses.

"Consumers deserve fair consideration when it comes to resolving these disputes," Assemblyman Peter Barnes III (D-Edison) said in a statement. "Being forced to travel out-of-state is not fair consideration. This bill targets unreasonable provisions for the benefit of not only consumers, but also companies who favor customer service."

Assemblyman Paul Moriarty (D-Turnersville) said the bill targets hidden language in contracts that is designed to put a consumer at a legal disadvantage.

"Consumers know full well, unfortunately, the frustration that builds when language found deep within the fine print of contracts purposefully makes it difficult to easily and readily resolve disputes," Moriarty said in a statement. "Residents and businesses that play by the rules deserve better, and that's why this bill is aimed solely at protecting the rights of consumers."

Assemblyman Patrick Diegnan (D-South Plainfield) said in a statement that "Companies with sound and fair contracts have nothing to worry about," adding that the legislation is specifically aimed at "companies that intentionally try to make it tough on consumers to resolve disputes."

The bill will now head to the full Assembly.

Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com and he is @AndrGeorge on Twitter.

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