Regulon — NY-SB-9381 · NY SB 9381 (Chatbot Liability)

WHAT THIS BILL REGULATES · 1 REQUIREMENT TYPE

How Is This Bill Enforced

Enforcement Authority

No designated agency enforcer specified. The bill prohibits proprietors from disclaiming liability and establishes that proprietors are responsible for chatbot outputs. Enforcement would likely arise through private civil actions under existing general business law frameworks. No explicit private right of action is created by the bill itself; liability arises by operation of the non-disclaimability provision.

Private Right of Action

No private right of action. Enforcement is exclusive to the designated authority.

Penalties

The bill does not specify statutory damages, penalty amounts, or attorney fee recovery. Liability attaches where a chatbot provides materially misleading, incorrect, contradictory, or harmful information resulting in financial loss or other demonstrable harm. The bill provides a 30-day cure period: no liability is imposed where the proprietor corrects the information and substantially or completely cures the harm within 30 days of notice. Remedies would be determined under existing civil law frameworks.

Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.

Statutory Text

Analysis & Obligations

Gen. Bus. Law § 390-f(1)

Definitions

(1)(a) "Chatbot" shall mean an artificial intelligence system, software program, or technological application that simulates human-like conversation and interaction through text messages, voice commands, or a combination thereof to provide information and services to users.

(1)(b) "Proprietor" refers to any person, business, company, organization, institution or government entity operating with more than twenty employees that owns, operates or deploys a chatbot system used to interact with users. Proprietors shall not include third-party developers that license their chatbot technology to a proprietor.

This subsection defines the two key terms for the bill: Chatbot and Proprietor. The chatbot definition is broad, encompassing any AI system that simulates human-like conversation via text, voice, or both. The proprietor definition is notable for two features: it applies only to entities with more than twenty employees, creating a small-business carve-out, and it expressly excludes third-party developers that merely license chatbot technology to the proprietor, placing liability squarely on the entity that deploys the chatbot to interact with users.

Gen. Bus. Law § 390-f(2)

Liability for chatbot responses

Deployer

(2)(a) 1 A proprietor of a chatbot used as an alternative to a human representative, or otherwise as an agent of the proprietor to provide any substantive response, information, advice, or action on behalf of the proprietor may not disclaim liability of any kind where a chatbot provides materially misleading, incorrect, contradictory or harmful information to a user that results in financial loss or other demonstrable harm to the user; provided, however, that no such liability shall be imposed where the proprietor has corrected the information and substantially or completely cured the harm to the user within thirty days of notice of such harm.

(2)(b) 2 The proprietor of a chatbot shall be responsible for ensuring such chatbot accurately provides information aligned with the formal policies, product details, disclosures and terms of service offered to users.

(2)(c) 1 A proprietor may not waive or disclaim this liability merely by notifying consumers that they are interacting with a non-human chatbot system.

This subsection establishes the bill's core liability framework. It prohibits proprietors from disclaiming liability when their chatbot provides materially misleading, incorrect, contradictory, or harmful information that results in financial loss or other demonstrable harm to a user. The 30-day cure provision allows proprietors to avoid liability by correcting the information and substantially or completely curing the harm after receiving notice — a meaningful safe harbor for proprietors with responsive customer service operations.

The subsection also imposes an affirmative obligation on proprietors to ensure chatbot accuracy relative to their own formal policies, product details, disclosures, and terms of service. Finally, it forecloses a strategy some deployers might otherwise rely on: merely notifying users that they are interacting with a non-human system does not waive or disclaim the proprietor's liability.

Compliance actions 2 items

Proprietors must not disclaim liability when their chatbot provides materially misleading, incorrect, contradictory, or harmful information that causes financial loss or other demonstrable harm to a user. This non-disclaimability cannot be circumvented by merely disclosing that the user is interacting with a non-human chatbot. Liability is excused only if the proprietor corrects the information and substantially or completely cures the harm within 30 days of notice.

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Proprietors must ensure their chatbot accurately provides information aligned with the proprietor's formal policies, product details, disclosures, and terms of service.

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Gen. Bus. Law § 390-f(3)

AI chatbot disclosure notice

Deployer

(3) 3 Proprietors utilizing chatbots shall provide clear, conspicuous and explicit notice to users that they are interacting with an artificial intelligence chatbot program rather than a human representative. The text of the notice shall appear in the same language and in a size easily readable by the average viewer and no smaller than the largest font size of other text appearing on the website on which the chatbot is utilized.

This subsection requires proprietors to provide clear, conspicuous, and explicit notice to users that they are interacting with an AI chatbot rather than a human representative. The notice must appear in the same language as the website and must be at least as large as the largest font size on the page — a prescriptive formatting requirement that goes beyond typical "clear and conspicuous" standards. Notably, while subsection (2)(c) establishes that this disclosure alone does not disclaim liability, the disclosure obligation itself remains independently enforceable.

Compliance actions 1 item

Proprietors must provide clear, conspicuous, and explicit notice to users that they are interacting with an AI chatbot rather than a human representative. The notice must appear in the same language as the website and in a font size no smaller than the largest font size of other text on the website.

T-01.1

S09381 § 2

Effective date

This act shall take effect on the ninetieth day after it shall have become a law.

The act takes effect on the ninetieth day after it becomes law. Because the bill has not been enacted, no specific effective date can be calculated.

Transparency AI identity disclosure · periodic reminders

1 item

T-01.1

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Other

2 items

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Proprietors must ensure their chatbot accurately provides information aligned with the proprietor's formal policies, product details, disclosures, and terms of service.

Passage Likelihood

Failed

Status Failed

Final action REFERRED TO INTERNET AND TECHNOLOGY

Legislative History

2024-05-14 REFERRED TO INTERNET AND TECHNOLOGY

Sources

Full Text ↗

Entry Last Reviewed

2026-05-20

AI generated