Bill Text: CA AB2365 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Contracts: unlawful contracts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-09 - Chaptered by Secretary of State - Chapter 308, Statutes of 2014. [AB2365 Detail]

Download: California-2013-AB2365-Amended.html

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BILL NUMBER: AB 2365	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 24, 2014

INTRODUCED BY   Assembly Member John A. Pérez

                        FEBRUARY 21, 2014

   An act to add Section 1670.8 to the Civil Code, relating to
contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   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  the
business,   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 or 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  in an unspecified amount
 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 
in an unspecified amount   of $10,000  if
that   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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1670.8 is added to the Civil Code, to read:
   1670.8.  (a)  (1)    A contract or proposed
contract for the sale or lease of consumer goods or services is
unlawful if it includes a provision requiring the consumer to waive
his or her right to make any statement regarding the consumer's
experience with the  business, or to threaten or seek to
enforce such a provision or to otherwise penalize a consumer for
making such a statement   seller or lessor or its
employees or agents  , unless the waiver of this right was
knowing, voluntary, and intelligent.  A provision in
violation of this section is unconscionable and against public
policy.  
   (2) It shall be unlawful to threaten or seek to enforce a
provision made unlawful under this section, 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, unless
the consumer has knowingly, voluntarily, and intelligently waived
his or her right to do so. 
   (b) The party that drafted the waiver provision has the burden of
proving that the waiver was knowing, voluntary, and intelligent.
   (c) Any waiver of the provisions of this section is contrary to
public policy, and is void and unenforceable.
   (d) Any person who violates this section shall be subject to a
civil penalty not to exceed  ____ dollars ($____) 
 two thousand five hundred dollars ($2,500)  for the first
 violation and ____ dollars ($____)   violation,
and five thousand dollars ($5,000) for the second and for each
subsequent violation, to be assessed and collected in a civil action
brought by the consumer, by the Attorney General, or by the district
attorney or city attorney of the county or city in which the
violation occurred. When collected, the civil penalty shall be
payable, as appropriate, to the consumer or to the general fund of
whichever governmental entity brought the action to assess the civil
penalty.
   (e) In addition, for a willful, intentional, or reckless violation
of this section, a consumer or public prosecutor may recover a civil
penalty not to exceed  ____ dollars ($ ____)  
ten thousand dollars ($10,000)  .
   (f) The penalty provided by this section is not an exclusive
remedy, and does not affect any other relief or remedy provided by
law.