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A04461
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2196
Session of
2024
INTRODUCED BY CONKLIN, RABB, HILL-EVANS, KINSEY, GIRAL,
McANDREW, PARKER, GUENST, MERSKI, SANCHEZ, McNEILL, HOWARD,
KHAN, HARKINS, DALEY, HADDOCK AND DELLOSO, APRIL 8, 2024
REFERRED TO COMMITTEE ON COMMERCE, APRIL 8, 2024
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:
"Acquirer." A person who purchased purchases or acquires a
contract or business from a seller and becomes a party to a
contract involving the sale or lease of a good or service.
"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
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effect for more than six months after the original effective
date of the original contract.
"Consumer." A person who receives goods, services,
maintenance or repairs purchases or leases services under a
contract.
"Contract." A written agreement for the sale or lease of a
good or performance of a service, including maintenance or
repair service, between a consumer and a seller vendor 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." A person who sells or transfers a contract to an
acquirer.
"Seller." "Vendor." A 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 vendor that enters or attempts to enter
into a contract in this Commonwealth that which 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 paragraph shall be amended or modified
to include the disclosure specified in paragraph (1).
(b) Notification upon sale or acquisition of business or
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contract.--After the sale or acquisition of a business that is a
party to a contract with an automatic renewal clause, or after
the sale or acquisition of a contract with an automatic renewal
clause, the acquirer shall, within 60 days, notify the customer
consumer of the sale. The notification shall clearly indicate
the change in ownership of the business or contract and provide
the customer consumer with an opportunity to opt out of the
automatic renewal provision.
(c) Notification prior to contract renewal.--
(1) A seller vendor or acquirer that has entered into a
is party to a contract in this Commonwealth that which
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. If the
seller vendor has changed and is no longer the original
seller vendor, the notification shall include a statement
indicating the change. No notice shall be required where the
consumer has canceled the contract.
(2) The notification under this subsection shall be
provided to the consumer no less than 30 days nor more than
60 days before the cancellation deadline under the automatic
renewal provision. An acquirer shall have complied with the
requirement under this paragraph if a notification under
subsection (b) was provided at least 120 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 paragraph, the
seller vendor shall provide the consumer with notification of
the automatic renewal in accordance with the requirements of
this section.
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(d) Contents of notice.--The notification required under
subsection (c) 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 vendor at a
specified telephone number or address, by referring to the
contract or by any other method.
(e) Proof of notification.--A seller vendor 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 vendor 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.
(f) 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 vendor to
cancel the contract or unless the seller vendor fails to comply
with the requirements of this section.
(g) Right of rescission.--A contract that 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 the consumer's residence
either in person or by telephone shall comply with the notice
provisions specified in section 7 of the act of December 17,
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1968 (P.L.1224, No.387), known as the Unfair Trade Practices and
Consumer Protection Law.
Section 4. Violations.
A seller vendor 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.
(a) General rule.--Except as provided in subsection (b),
this act shall apply to contracts executed or renewed after the
effective date of this subsection.
(b) Exceptions.--This act shall not apply to:
(1) 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) A contract subject to the act of December 21, 1989
(P.L.672, No.87), known as the Health Club Act.
(3) A person or entity providing service contracts as
defined in section 358 of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921, or an
affiliate of the person or entity.
(4) A person or entity regulated by the Insurance
Department or an affiliate of the person or entity.
(5) A contract subject to the act of December 3, 1996
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(P.L.802, No.138), known as the Electricity Generation
Customer Choice and Competition Act.
(6) A contract subject to the act of June 22, 1999
(P.L.122, No.21), known as the Natural Gas Choice and
Competition Act.
(7) A contract between a consumer and a bank, savings
association, credit union, trust company, a licensee subject
to 7 Pa.C.S. Ch. 61 (relating to Mortgage Loan Industry
Licensing and Consumer Protection), or an affiliate of any of
these businesses, including the sale, assignment or transfer
of a contract to any other business or affiliate.
Section 8. Effective date.
This act shall take effect in 60 days.
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