Regular Session 2017-2018 House Bill 1369 P.N. 1722

PRINTER'S NO. 1722

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1369

Session of

2017

INTRODUCED BY RABB, DUNBAR, DRISCOLL, V. BROWN, JAMES, DAVIDSON,

MILLARD, FREEMAN, RYAN, McNEILL, KINSEY, ROZZI, SCHWEYER,

BARRAR, DeLUCA, KIRKLAND, DONATUCCI AND FRANKEL, MAY 11, 2017

REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, MAY 11, 2017

AN ACT

Providing for automatic renewal provisions in certain contracts

for goods and services.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Contract

Automatic Renewal Act.

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Automatic renewal provision." A provision of a contract

under which the contract is renewed for a specific period of

more than one month, if the renewal causes the contract to be in

effect for more than six months after the effective date of the

original contract.

"Consumer." A person who receives goods, services,

maintenance or repairs under a contract.

"Contract." A written agreement for the sale of a good or

performance of a service, including maintenance or repair

service, between a consumer and a seller over a fixed period of

time or for a specified duration. The term does not include an

agreement that allows a consumer to cancel the agreement at any

time and to receive upon cancellation a pro rata refund of any

unearned amounts paid by the consumer.

"Seller." Any person engaged in trade or commerce in this

Commonwealth who advertises, sells, leases or offers to sell or

lease a good or service to a consumer under a contract.

Section 3. Contracts with automatic renewal provisions.

(a) Disclosure required.--

(1) A seller that enters or attempts to enter into a

contract in this Commonwealth that includes an automatic

renewal provision shall disclose the automatic renewal

provision in the contract or contract offer in boldface of a

size no less than that of the surrounding text, but under no

circumstances in a font size less than 10 points.

(2) A contract that is amended or modified after the

effective date of this section shall be amended or modified

to include the disclosure specified in paragraph (1).

(b) Notification prior to contract renewal.--

(1) A seller that has entered into a contract in this

Commonwealth that automatically renews for a specified period

of more than one month shall provide the consumer with

written or electronic notification of the automatic renewal

provision. No notice shall be required where the consumer has

canceled the contract.

(2) The notification under this subsection shall be

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provided to the consumer no less than 30 days nor more than

60 days before the cancellation deadline under the automatic

renewal provision.

(3) For a contract that is scheduled to automatically

renew following the effective date of this act, the seller

shall provide the consumer with notification of the automatic

renewal in accordance with the requirements of this section.

subsection (b) shall disclose clearly and conspicuously:

(1) That unless the consumer cancels the contract before

the cancellation deadline, the contract will automatically

renew.

(2) The cancellation deadline.

(3) The method by which the consumer may obtain details

of the automatic renewal provision and cancellation

procedure, whether by contacting the seller at a specified

telephone number or address, by referring to the contract or

by any other method.

(d) Proof of notification.--A seller must retain proof of

the notification provided to a consumer, subject to a contract

with an automatic renewal provision. The proof of notification

shall be retained by the seller for six years following the

expiration of the term during which the notification was sent.

The proof of notification may be retained in an electronic

format.

(e) Automatic renewal effective.--An automatic renewal

provision in a contract shall be valid unless the consumer gives

notice to the seller of the consumer's intention to cancel the

contract or unless the seller fails to comply with the

requirements of this section.

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(f) Right of rescission.--A contract which contains an

automatic renewal provision in which the goods or services have

a sale price of at least $25 and which are sold or contracted to

be sold to a consumer as a result of, or in connection with, a

contact with or call on the consumer at his residence either in

person or by telephone shall comply with the notice provisions

specified in section 7 of the act of December 17, 1968

(P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

Section 4. Violations.

A seller that fails to comply with the requirements of

section 3 is in violation of this act.

Section 5. Void provisions.

An automatic renewal provision of a contract in violation of

this act is void and unenforceable in this Commonwealth.

Section 6. Enforcement.

A violation of this act shall constitute an unfair or

deceptive trade or practice for purposes of the act of December

17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices

and Consumer Protection Law, and shall be subject to the penalty

and enforcement provisions of that act.

Section 7. Applicability.

This act shall apply as follows:

(1) This act shall not apply to a lease subject to the

act of April 6, 1951 (P.L.69, No.20), known as The Landlord

and Tenant Act of 1951.

(2) This act shall not apply to a contract subject to

the act of December 21, 1989 (P.L.672, No.87), known as the

Health Club Act.

(3) This act shall apply to all contracts signed or

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renewed after the effective date of this section.

Section 8. Effective date.

This act shall take effect in 60 days.

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