[First Reprint]

ASSEMBLY, No. 3434







Sponsored by:

Assemblyman  PAUL D. MORIARTY

District 4 (Camden and Gloucester)

Assemblyman  PATRICK J. DIEGNAN, JR.

District 18 (Middlesex)

Assemblyman  PETER J. BARNES, III

District 18 (Middlesex)


District 15 (Mercer)


Co-Sponsored by:

Assemblyman Wisniewski






     Requires review of arbitration agreements for unconscionability.



     As amended by the General Assembly on May 9, 2011.


An Act concerning unconscionability of arbitration agreements and amending P.L.2003, c.95.


     Be It Enacted by the Senate and General Assembly of the State of New Jersey:


     1.    Section 6 of P.L.2003, c.95 (C.2A:23B-6) is amended to read as follows:

     6.    Validity of Agreement to Arbitrate.

     a.     An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

     b.    The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.

     c.     An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.

     d.    If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.

     e.     When determining the validity of an agreement to arbitrate, the court shall consider whether the agreement is unconscionable by considering all relevant circumstances, including, but not limited to:

     (1)   Whether the contract is a standardized form, and the party who did not prepare the contract must accept or decline to enter into the contract without an opportunity to negotiate or change the terms of the agreement to arbitrate; and

     (2)   Whether the arbitration agreement contains clauses providing for:

     (a)   The location of arbitration;

     (b)   The expenses of arbitration;

     1[(c) Denial of the ability to consolidate arbitration or to have arbitration for a class of persons involving substantially similar issues;]1 and

     1[(d)] (c)1 Other unreasonably one-sided terms that may represent a serious disadvantage to the party that did not prepare the form.

     1This subsection shall not be construed to apply to an arbitration conducted or administered by a self-regulatory organization as
defined by the Securities Exchange Act of 1934 (15 U.S.C. Section 78C), the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), or regulations adopted under those acts.

(cf:  P.L.2003, c.95, s.6)


     2.    This act shall take effect on the 90th day following enactment.