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SB 968: Universal default prohibition (2007)


Senate Bill 968 prohibits the inclusion of a “universal default” provision in California contracts.  A “universal default” provision is a provision in which a fee, financial penalty, change in terms, or damage is automatically assessed or implemented for an act, default, or behavior that does not directly affect the contract.  Under current law, companies are not required to ensure the consumer is aware of any change resulting from a universal default provision.  Used as standard language in a growing number of consumer agreements and contracts, many consumers are not aware of the clause until a after a penalty has been assessed against them.  Once assessed, a consumer cannot appeal or negotiate a reversal of the penalty.

For more information, you can read the SB 968 "Fact Sheet" prepared by a member of Senator Simitian's staff.

Final Status and Text

SB 968 is no longer active. Its final status was:
Did not pass the Legislature

You can read its final text on the Legislature's Bill Information site.

News & Press Releases about SB 968

04/04/2007 - 'There Oughta Be a Law' contest winners chosen

04/04/2007 - Winners Announced for Public Contest to Invent New Laws (audio)

04/03/2007 - Senator Simitian Announces Winners of 2007 "There Oughta Be A Law" Contest