Bill Text: NJ S3581 | 2018-2019 | Regular Session | Introduced
Bill Title: Prohibits certain business financing contracts that contain judgment by confession provisions. *
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2020-01-21 - Approved P.L.2019, c.430. [S3581 Detail]
Download: New_Jersey-2018-S3581-Introduced.html
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Prohibits certain business financing contracts that contain confession by judgment provisions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning business financing and confession by judgment and supplementing chapter 16 of Title 2A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. (1) No provider shall extend business financing to a concern in this State that contains a judgment by confession.
(2) No judgment shall be entered on warrant of attorney in any action on a bond or other instrument for the payment of money, except on motion after notice to the defendant served in lieu of summons in accordance with applicable court rules or by registered or certified mail.
b. A provision of any contract for business financing that provides for a judgment by confession that does not meet the requirements of subsection a. of this section shall be invalid and unenforceable against any concern.
c. As used in this section:
"Business financing" means a loan, line of credit, cash advance, factoring or asset-based transaction made for a business purpose.
"Concern" means any trade, business or professional entity conducted for profit, and includes, but is not limited to, individuals, partnerships, corporations, joint ventures, associations and cooperatives.
"Judgment by confession" means a written agreement that accepts liability and specifies damages in cases in which a concern is in violation of a business financing agreement.
2. This act shall take effect on the 90th day next following the date of enactment.
STATEMENT
This bill prohibits providers from extending business financing to a concern in this State that contains a judgment by confession. The bill provides that no judgment may be entered on warrant of attorney in any action on a bond or other instrument for the payment of money, except on motion after notice to the defendant served in lieu of summons in accordance with applicable court rules or by registered or certified mail.
Under the bill, a provision of any contract for business financing that provides for a judgment by confession that does not meet the requirements of the bill is invalid and unenforceable against any concern.
The bill provides that "judgment by confession" means a written agreement that accepts liability and specifies damages in cases in which a concern is in violation of a business financing agreement.
