PRINTER'S NO. 605
No. 538 Session of 1983
INTRODUCED BY KUKOVICH, DeWEESE, WAMBACH, IRVIS, SEVENTY, TIGUE,
WACHOB, CIMINI, WOZNIAK, SWEET, GALLAGHER, COWELL, WILSON,
ARTY, FATTAH, AFFLERBACH, OLIVER, PRATT, GRUPPO, LEVIN,
PISTELLA, HOEFFEL, CAWLEY, ZWIKL, J. L. WRIGHT, EVANS,
SHOWERS, LLOYD, FARGO, CLARK, MICOZZIE, PETRARCA, BELARDI,
COY, HALUSKA, MICHLOVIC, LETTERMAN, D. R. WRIGHT, DAWIDA,
MORRIS, LASHINGER, BLAUM, VAN HORNE, KOSINSKI, PRESTON,
WARGO, JACKSON, BELFANTI, MERRY, BALDWIN, GANNON, STEIGHNER,
PERZEL, COHEN, FISCHER, ITKIN, F. E. TAYLOR, DeLUCA, DAVIES,
RICHARDSON, McHALE AND MURPHY, MARCH 22, 1983
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MARCH 22, 1983
AN ACT
1 Requiring all consumer contracts to be written in plain
2 language.
3 TABLE OF CONTENTS
4 Section 1. Short title.
5 Section 2. Legislative findings and intent.
6 Section 3. Definitions.
7 Section 4. Application of act.
8 Section 5. Tests of readability.
9 Section 6. Guidelines for averaging sentences and
10 syllables.
11 Section 7. Damages, other remedies, and enforcement.
12 Section 8. Limitations on liability.
13 Section 9. Language required by other law.
14 Section 10. Invalid consumer contract provisions.
1 Section 11. Other rights and defenses preserved.
2 Section 12. Effective date.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act is named and may be cited as the Plain Language
7 Consumer Contract Act.
8 Section 2. Legislative findings and intent.
9 (a) Legislative findings.--The General Assembly finds that
10 most consumer contracts are written and arranged in a way that
11 makes them hard for consumers to understand. Competition would
12 be aided if these contracts were easier to understand.
13 (b) Legislative intent.--By passing this act, the General
14 Assembly wants to promote the writing of consumer contracts in
15 plain language. This act will protect consumers from making
16 contracts that they do not understand. It will help consumers to
17 know better their rights and duties under those contracts. This
18 act must be liberally interpreted to protect consumers.
19 Section 3. Definitions.
20 The following words and phrases when used in this act have
21 the meanings given to them in this section:
22 "Consumer" means a man or woman, or both, who borrows, buys,
23 leases or obtains credit, money, services or property under a
24 consumer contract.
25 "Consumer contract" or "contract" means a written agreement
26 made mainly for personal, family or household purposes in which
27 a consumer does any of the following:
28 (1) Borrows money.
29 (2) Buys, leases or rents for cash or on credit personal
30 property, real property or services.
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1 (3) Obtains credit.
2 (4) Obtains insurance coverage. This act also applies to
3 the statements of a group insurance policy that are given out
4 to members of the group.
5 Section 4. Application of act.
6 (a) General application.--This act applies to all consumer
7 contracts that are made, solicited or intended to be performed
8 in this Commonwealth.
9 (b) Exclusions.--This act does not apply to the following:
10 (1) Property descriptions in deeds and mortgages, real
11 estate certificates of title, and title insurance contracts.
12 (2) Contracts to buy securities.
13 (3) Contracts between people who are not acting in the
14 usual course of business.
15 Section 5. Tests of readability.
16 (a) General rule.--All consumer contracts made or renewed
17 after the effective date of this act must be written and
18 organized so they are easy to read and understand.
19 (b) Language requirements.--A contract must pass all six of
20 the following language tests:
21 (1) The contract as a whole has sentences with an
22 average of no more than 20 words.
23 (2) It has words with an average of no more than 1.5
24 syllables.
25 (3) It does not use technical legal terms, Latin words,
26 archaic English, words specially defined in the consumer
27 contract, or everyday words used in a specialized legal
28 sense.
29 (4) It uses only the personal pronouns you, your or
30 yours when referring to the consumers in the body of the
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1 contract. It uses only we, us, or our when referring to the
2 creditor, lessor, insurer, or seller in the body of the
3 contract.
4 (5) It does not have sentences with double negatives or
5 exceptions to exceptions.
6 (6) It does not have bare references to other provisions
7 in the same contract, to outside documents, or to laws of any
8 type. References must clearly describe their substance.
9 (c) Visual requirements.--A contract must pass all four of
10 the following visual tests:
11 (1) The type is at least 10 point in size.
12 (2) It has line length, column width, margins, and
13 spacing between lines and paragraphs that make the contract
14 easy to read.
15 (3) It captions each section in boldface type of at
16 least 12 point in size. If the contract is typed, the
17 captions are underlined.
18 (4) It uses ink that contrasts sharply with the paper.
19 (d) Consumer restrictions highlighted.--
20 (1) A contract must have a statement on its front page,
21 in a box, that highlights all of the following:
22 (i) Limitations on making claims, filing a lawsuit,
23 the type of relief or warranties.
24 (ii) Waivers or limitations of rights.
25 (iii) Exclusions.
26 (iv) Property that may be taken or affected if the
27 consumer does not meet the terms of the contract.
28 (2) The highlighted statement must be in 10-point
29 boldface type and not in all capitals. It must have this
30 caption in all capitals: "PLEASE READ THIS" in 12-point
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1 boldface type. If the contract is typed, the text of the
2 statement must be underlined and the caption "PLEASE READ
3 THIS" in all capitals.
4 (3) Any part of the contract that must be highlighted
5 under this subsection but is not highlighted as required is
6 void, not just voidable.
7 Section 6. Guidelines for averaging sentences and syllables.
8 (a) General guidelines.--The following guidelines are to be
9 used to check compliance with the tests of readability set out
10 in section 5:
11 (1) Do not count words or numbers used in titles,
12 headings, section and paragraph numbers, date lines, and
13 signature lines. Do not count language required by statute,
14 regulation or rule.
15 (2) A "sentence" is a unit of written language that ends
16 with a period, question mark, or exclamation point. Disregard
17 paragraph breaks, colons, semicolons, or dashes.
18 (3) A "syllable" is a unit of spoken language made up of
19 one or more letters of a word, as the word is divided by any
20 dictionary. Count the syllables in words as they are
21 pronounced. Count abbreviations, numbers, or symbols as one-
22 syllable words. If there are two or more accepted ways to
23 pronounce a word, use the one with fewer syllables. If in
24 doubt, check a dictionary.
25 (b) How to average words per sentence.--Count the total
26 number of words and sentences in the whole contract, except for
27 the items listed in subsection (a)(1). Then divide the number of
28 words by the number of sentences. This gives you the average
29 number of words per sentence.
30 (c) How to average syllables per word.--Count the total
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1 number of syllables and words in the whole contract, except for
2 the items listed in subsection (a)(1). Then divide the number of
3 syllables by the number of words. This gives you the average
4 number of syllables per word.
5 Section 7. Damages, other remedies, and enforcement.
6 (a) Damages and other remedies.--Any creditor, lessor,
7 insurer, or seller who does not comply with the tests of
8 readability set out in section 5 is liable to that consumer for
9 all of these items:
10 (1) Out-of-pocket damages.
11 (2) Statutory damages of $500. If the total amount of
12 the contract is less than $500, the damages are the total
13 amount of the contract.
14 (3) Court costs and reasonable attorney's fees.
15 (4) Any equitable and other relief that the court thinks
16 necessary and proper.
17 (b) Enforcement.--The Attorney General or a district
18 attorney may bring a lawsuit in the name of the Commonwealth
19 against any person to enforce this act. In this lawsuit the
20 Attorney General or district attorney may seek equitable and
21 legal relief, including stopping violations of the act from
22 occurring, getting the consumer's money back, and seeking
23 statutory damages.
24 (c) Assurance of voluntary compliance.--The Attorney General
25 or a district attorney may also accept an assurance of voluntary
26 compliance as to any suspected violation of this act from any
27 person who has done or was about to do the act thought to be a
28 violation. The assurance may include an agreement to give back
29 to consumers their money or property. The assurance must be in
30 writing and must be filed with the court of common pleas where
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1 the suspected violator lives, has his main place of business, or
2 is doing business, or with the Commonwealth Court. When filed,
3 the assurance has the same force and effect as a court order.
4 The assurance is not an admission of violation for any purpose.
5 The Attorney General or a district attorney may at any time
6 reopen a matter closed by an assurance for more proceedings in
7 the public interest.
8 Section 8. Limitations on liability.
9 (a) Limitations generally.--There will be no liability under
10 section 7 if any of the following occur:
11 (1) The contract has been carried out by all the parties
12 or their rights and duties have been fulfilled.
13 (2) The contract was drawn up only by the consumer.
14 (3) The creditor, seller, insurer, or lessor shows by a
15 preponderance of the evidence that its violation of the act
16 was not intentional and that the violation was the result of
17 a good faith clerical error. This error must have happened in
18 spite of the use of reasonable procedures that were designed
19 to avoid this type of error.
20 (b) Time limit for starting a lawsuit.--A lawsuit under this
21 act must be started within four years after the date on which
22 the contract was last signed.
23 Section 9. Language required by other law.
24 The use of specific language required by Federal or State
25 statute, regulation, or rule does not violate this act. This
26 language must be excluded when using the tests of readability
27 set out in section 5.
28 Section 10. Invalid consumer contract provisions.
29 (a) Contract provisions that violate the act.--Any part of a
30 contract that does not pass any of the tests of readability set
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1 out in section 5, except for the test for averages of sentences
2 and syllables, is void, not just voidable, as used against a
3 consumer. A creditor, lessor, insurer, or seller may not void
4 the entire contract solely because a consumer voids one or more
5 sections as allowed by this section.
6 (b) Waiver of rights invalid.--A consumer cannot waive the
7 rights given by this act. Such a waiver is void, not just
8 voidable.
9 Section 11. Other rights and defenses preserved.
10 A consumer may make any claim or raise any defense that he or
11 she could have used if this act were not in effect.
12 Section 12. Effective date.
13 This act will take effect in one year.
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