SB 82 adds Civil Code section 1670.15 and narrows what a consumer contract can make a dispute-resolution clause cover. For any "consumer use agreement," dispute-resolution terms may only relate to the use, payment for, or provision of the specific good, service, money, or credit that the contract provides; any waiver of that limit is void and unenforceable.
The law requires courts to interpret the provision liberally for the purpose of protecting consumers and clarifies that it sits alongside, rather than replaces, other protections found in state or federal law. The change matters for merchants, platforms, lenders, and lawyers who draft standard form consumer agreements because it restricts the reach of forum-selection and ADR clauses and invites litigation over what disputes fall inside the narrow statutory scope.
At a Glance
What It Does
The statute defines a "consumer use agreement" and constrains dispute-resolution clauses so they can address only disputes about the contract’s core subject—use, payment, or provision of the good, service, money, or credit supplied. It declares any waiver of those limitations void, orders liberal construction in favor of consumers, and states the provision is cumulative with other laws.
Who It Affects
The provision applies to any "person" contracting with a consumer as those terms are defined by cross-reference to Business and Professions Code §302; that means retailers, service providers, fintech firms, lenders, and platform operators that use standard consumer agreements are in scope. Contract drafters, in-house counsel, and dispute-resolution providers will need to revisit clause scope and enforcement strategies.
Why It Matters
By narrowing the permissible scope of dispute-resolution terms, SB 82 reduces the ability of contracts to sweep unrelated claims—such as consumer complaints about advertising, data practices, or third-party conduct—into a single ADR forum unless the claim ties back to the contract’s use/payment/provision. This creates interpretive questions courts will resolve and raises potential conflicts with federal arbitration law and multistate contracting practices.
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What This Bill Actually Does
SB 82 creates a new Civil Code provision aimed at limiting the reach of dispute-resolution clauses in consumer-facing contracts. It does this by first defining the covered instruments as "consumer use agreements," i.e., contracts a consumer enters to use, receive, or otherwise enjoy a good, service, money, or credit.
The statute then bars dispute-resolution terms from covering anything beyond issues that concern the use, payment for, or provision of that specific good, service, money, or credit.
The bill makes an express rule that any attempt to waive these limits is void and unenforceable and directs courts to interpret the section liberally to protect consumers. Importantly, the statute cross-references Business and Professions Code §302 for the statutory meanings of "consumer" and "person," which anchors the provision in existing definitions used across California consumer statutes.Finally, SB 82 adds a saving clause: the duties it imposes are cumulative with other laws and do not relieve parties of obligations or limit rights under other statutes.
Practically, that means the section is intended to coexist with other consumer protections rather than displace them. For contract drafters, the immediate compliance task is to re-scope dispute-resolution language so it cannot be read to reach claims that do not directly relate to the contract’s provision, payment, or use of the covered good, service, money, or credit.
For litigators and judges, the statute will generate disputes over the dividing line between covered and noncovered claims and over how broadly "use, payment, or provision" should be interpreted in different commercial contexts.
The Five Things You Need to Know
SB 82 adds Civil Code §1670.15, a standalone statute addressing dispute-resolution clauses in consumer agreements.
It defines "consumer use agreement" as any contract a consumer enters to use, receive, or enjoy a good, service, money, or credit.
The statute limits dispute-resolution terms to disputes about the use, payment for, or provision of the specific good, service, money, or credit the agreement supplies.
Any contract provision that attempts to waive the section’s limits is declared contrary to public policy and is void and unenforceable.
The law requires liberal construction in favor of consumers and states that its duties are cumulative with, and do not displace, other legal rights or obligations.
Section-by-Section Breakdown
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Definitions—consumer, person, and consumer use agreement
Subdivision (a) supplies three operative definitions. It borrows the statutory meanings of "consumer" and "person" from Business and Professions Code §302 (subdivisions (c) and (d)), thereby aligning this section with existing California consumer-law terminology. It also introduces "consumer use agreement" as the key scope device: a contract a consumer enters to use, receive, or otherwise enjoy a good, service, money, or credit. That choice focuses application on typical retail, service, and financial-product transactions rather than on employment or purely commercial B2B contracts.
Substantive limit on dispute-resolution terms
Subdivision (b) contains the operative rule: dispute-resolution terms and conditions in a consumer use agreement "shall be limited to the use, payment, or provision" of the good, service, money, or credit provided by that agreement. Practically, this constrains forum-selection and ADR clauses from covering unrelated torts, statutory claims, or regulatory complaints unless those claims are directly about how the consumer used the product, paid for it, or received the money/credit. The clause forces a narrower drafting approach and creates a line-drawing task for courts.
Waiver prohibition
Subdivision (c) declares any waiver of the section’s protections "contrary to public policy and void and unenforceable." That language prevents parties from contractually disclaiming the statute’s limits, so a clause purporting to waive the statute would not be given effect. The provision places an explicit constraint on bilateral amendment or arbitration-venue choice that would otherwise dilute the statute.
Construction rule and relationship to other law
Subdivision (d) instructs courts to "liberally construe" the section to protect consumers, signaling a pro-consumer interpretive tilt. Subdivision (e) makes the statute cumulative—it neither replaces nor narrows other statutory or common-law remedies. Together these subsections indicate legislative intent that courts prioritize consumer-protective readings while preserving existing remedies and obligations under other laws, which will affect how judges harmonize §1670.15 with overlapping statutes or doctrines.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Consumers who sign standard-form agreements: The statute narrows the types of disputes companies can force into selected ADR forums or clauses, reducing the ability of firms to fold unrelated claims into a contract’s dispute-resolution mechanism.
- Consumer-plaintiff attorneys and class-action plaintiffs: Narrower clause scope increases opportunities to pursue claims in court or different forums when disputes do not squarely concern the contract’s use, payment, or provision.
- State regulators and enforcement agencies: The cumulative clause preserves regulators’ existing powers and makes it harder for contractual language to preempt or deflect regulatory complaints into private ADR channels.
- Small vendors who rely on simple, narrow dispute-resolution terms: Those who already limit their clauses to the transaction itself face lower compliance burdens than firms using broad, catch-all dispute provisions.
Who Bears the Cost
- Retailers, platforms, and lenders that use broad ADR or class-waiver clauses: They will need to revise contracts, update intake flows, and potentially face more litigation in courts rather than consolidated ADR forums.
- In-house and outside counsel responsible for contract templates: Redrafting standard form agreements and defending clause scope will increase transactional and litigation costs, at least during the transition and litigation over scope.
- Arbitration and mediation providers: Narrower enforceable clauses could reduce the number of disputes routed into private ADR for consumer matters, cutting volume for providers that serve consumer markets.
- Courts and judges: Expect increased motion practice and factual disputes about whether a claim "relates to" use/payment/provision, which will impose evidentiary and docket burdens as judges parse statutory scope.
Key Issues
The Core Tension
The bill pits consumer-protective clarity—preventing companies from using blanket dispute-resolution language to capture unrelated claims—against contractual predictability and efficiency favored by businesses and ADR systems; courts will also have to reconcile those state limits with federal arbitration law, leaving no simple path that fully satisfies both sets of interests.
The statute’s core phrase—"limited to the use, payment, or provision"—is short but factually loaded. It will generate litigation over whether claims that touch on advertising, data privacy, third-party seller conduct, product design defects, or regulatory violations are within the permitted scope.
For example, a privacy claim tied to data the consumer provided while using an app may or may not be characterized as related to "use" depending on how courts read that term. Those border disputes will materially affect how much litigation the statute actually prevents.
A second practical tension is federal preemption and arbitration law. SB 82 does not explicitly mention arbitration or the Federal Arbitration Act (FAA).
California courts will need to reconcile state limitations on dispute-resolution clauses with federal standards that generally favor enforcement of arbitration agreements. That reconciliation could generate constitutional or preemption challenges, or it could result in narrow judicial constructions of §1670.15 to avoid conflict with federal law.
Finally, the statute’s "cumulative" saving clause preserves other rights but does not solve cross-jurisdictional contracting problems for businesses operating in multiple states or internationally, who will face inconsistent rules about permissible ADR scope and enforcement.
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