PRINTER'S NO. 3097
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2290
Session of
2024
INTRODUCED BY HOWARD, CONKLIN, WAXMAN, KHAN, HILL-EVANS,
SANCHEZ, DELLOSO, D. WILLIAMS AND WARREN, MAY 14, 2024
REFERRED TO COMMITTEE ON JUDICIARY, MAY 14, 2024
AN ACT
Amending the act of June 23, 1993 (P.L.128, No.29), entitled "An
act requiring certain contracts to be written in plain
language; and providing remedies and penalties," further
providing for definitions and providing for enforceability of
standardized terms in form contracts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 3 of the act of June 23, 1993 (P.L.128,
No.29), known as the Plain Language Consumer Contract Act, is
amended to read:
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Consumer." Any individual who borrows, buys, leases or
obtains credit, money, services or property under a consumer
contract or form contract.
"Consumer contract" or "contract." A written agreement
between a consumer and a party acting in the usual course of
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business, made primarily for personal, family or household
purposes in which a consumer does any of the following:
(1) Borrows money.
(2) Buys, leases or rents personal property, real
property or services for cash or on credit.
(3) Obtains credit.
"Form contract." A consumer contract with standardized terms
used by a merchant acting in the course of selling or leasing
the merchant's goods or services to a consumer without a
meaningful opportunity for the consumer to negotiate the
standardized terms. Terms in which the consumer selects from
various standardized provisions offered by the merchant shall
not be regarded as negotiated.
Section 2. The act is amended by adding a section to read:
Section 5.1. Enforceability of standardized terms in form
contracts.
(a) General rule.--If a merchant presents a form contract to
a consumer containing standardized terms that would materially
alter the consumer's legal rights or obligations under the form
contract, the standardized terms are not enforceable, regardless
of whether the form contract would otherwise be construed as
enforceable.
(b) Materiality.--Whether a standardized term materially
alters a form contract is to be decided by a court after
consideration of all of the following factors:
(1) Whether the standardized term would cause surprise
or hardship for the consumer.
(2) Whether the consumer was expressly aware of the
standardized term.
(3) Whether the consumer had reasonable notice of the
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standardized term.
(4) The nature of the merchant's business and its
relationship with the consumer.
(5) The extent to which all terms of the contract,
including the standardized term, were negotiable.
(6) Any other reasonable factor brought to the attention
of the court.
(7) Whether adequate and reasonable consideration has
been provided for the standardized term by other terms within
the form contract.
(c) Rebuttable presumption.--The following carry a
rebuttable presumption of materially altering a form contract:
(1) a standardized term that would unreasonably restrict
or waive a consumer's rights to the consumer's intellectual
property;
(2) standardized terms that limit the consumer's
ownership of intellectual property reasonably assumed to be
sold or licensed as part of the transaction;
(3) standardized terms that limit the consumer's right
to resell or transfer;
(4) standardized terms that limit the merchant's or
manufacturer's liability;
(5) standardized terms that dictate a legal forum for
dispute resolution;
(6) standardized terms that require exclusive use of a
product or service of the merchant;
(7) standardized terms that require a subscription to a
service;
(8) standardized terms that prevent the transfer of
warranties; or
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(9) standardized terms that require the consumer to
exclusively use parts or repair services stipulated by the
merchant or manufacturer.
(d) Signature as evidence.--A consumer's signature, whether
printed, typed or electronically signed, or by any other
confirmation, shall not be regarded as evidence of awareness of
a standardized term.
(e) Applicability.--This section applies to all form
contracts executed in this Commonwealth after the effective date
of this section and regardless of whether the form contract is
presented as part of an electronic or paper transaction, with
the exception of a contract excluded by section 4(b).
Section 3. This act shall take effect in 60 days.
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