HF 2165

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; limiting the use of evergreen clauses in certain leases and
contracts; proposing coding for new law in Minnesota Statutes, chapter 325E.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

[325E.70] AUTOMATIC RENEWAL CLAUSES; LIMITATION.

Subdivision 1.

Applicability.

This section applies to leases or other contracts for the
provision of services or equipment entered into between two or more business entities,
including sole proprietors, if the initial term or any renewal of the lease or other contract is
for a period greater than one year.

Subd. 2.

Automatic renewals.

A lease or other contract described in subdivision 1
must not contain an automatic renewal clause, unless the lease or contract also requires
that the lessor or seller of the services or equipment provide to the lessee or buyer a written
reminder notice of the automatic renewal clause and of the last day upon which the lessee
or buyer may give notice of nonrenewal. The written reminder notice must be provided to
the lessee or buyer no later than 30 days, and no more than 90 days, prior to the last day
upon which the lessee or buyer may give notice of nonrenewal.

Subd. 3.

Remedy.

An automatic renewal clause for which a written reminder notice
is required under subdivision 2 becomes void if:

(1) the lease or contract does not contain the requirement that the written reminder
notice be given; or

(2) the written reminder notice is not given at the required time.

EFFECTIVE DATE.

This section is effective January 1, 2008, and applies to leases
or contracts entered into on or after that date.