Defines certain terms in standard form contracts as unconscionable

2025 Regular Session Introduced by Pete Harckham

Defines select standard-form contract terms as unconscionable, risking unenforceability; protects consumers while prompting businesses to revise terms and curb abusive practices.

REFERRED TO CONSUMER PROTECTION

Summary of Bill S 4996

Overview and purpose

S 4996 would define certain terms used in standard form contracts as unconscionable. By labeling specific contractual terms as unconscionable, the bill aims to strengthen consumer protection by making such terms potentially unenforceable or subject to challenge in appropriate proceedings.

Key provisions (high-level)

The core provision would specify that selected terms within standard form contracts are unconscionable. The text you provided does not include the exact terms or definitions, but the intent is to treat those terms as objectionable under unconscionability standards.

Consequences of designating terms as unconscionable typically include: difficulty for the terms to be enforced against consumers, potential invalidation of those terms, and possible enforcement or remedial actions by consumer protection authorities if a contract contains such terms.

Affected parties

Consumers who enter into standard form contracts (e.g., consumer credit, service agreements, telecommunications, rental/lease agreements, and other mass-produced contracts).

Businesses that draft or rely on standard form contracts, including lenders, service providers, insurers, telecoms, and other consumer-facing industries.

Legal professionals and courts, which would interpret and apply the unconscionability designations in disputes involving standard form terms.

Legislative status and process

Introduced on February 14, 2025.

Referred to the Consumer Protection committee on February 14, 2025 (listed twice in the actions, indicating a standard committee referral).

Primary sponsorship by Pete Harckham.

There are companion or related bills in prior sessions (e.g., A636 as a companion), and additional related bills in prior sessions (A10065, A2855, A423, S8377, S5386).

Related bills

Companions and related legislation in both houses include: A 636 (companion), A 423, A 2855, A 10065 (prior-session), S 8377 (prior-session), S 5386 (prior-session).

This pattern suggests ongoing interest in regulating unconscionable terms in standard form contracts across sessions.

Potential impact and considerations

If enacted, the bill could increase scrutiny of standard form terms and push businesses to revise contracts to avoid unenforceable terms.

Could lead to greater enforcement actions or remedies for consumers when such terms are challenged.

Businesses may need to review and revise standard form agreements to ensure compliance and minimize risk of terms being deemed unconscionable.

Next steps / timeline

As currently listed, the bill has been referred to the Consumer Protection committee. If advanced, it would move through committee hearings, potential amendments, and floor votes in the chamber, followed by actions in the other house (if applicable) before final passage and potential enactment.