HF 1802

as introduced - 89th Legislature (2015 - 2016) Posted on 03/12/2015 02:04pm

A bill for an act
relating to contracts; regulating automatic renewal clauses in consumer contracts;
proposing coding for new law in Minnesota Statutes, chapter 325G.

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

Section 1.

new text begin [325G.56] AUTOMATIC RENEWAL OF CONSUMER CONTRACTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "automatic renewal clause" means a provision of a contract that extends the
term of or renews a contract if the consumer does not take a specified action, provided
the original contract term is for one year or more and the contract automatically renews
for more than one month;
new text end

new text begin (2) "consumer" means a person who acquires goods or services for personal, family,
or household purposes; and
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new text begin (3) "seller" means a person who provides a service or sells or leases goods to the
consumer.
new text end

new text begin Subd. 2. new text end

new text begin Requirements for automatic renewal. new text end

new text begin If a contract between a seller and a
consumer contains an automatic renewal clause, the seller shall:
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new text begin (1) clearly and conspicuously disclose to the consumer the automatic renewal clause
and the procedure for canceling the automatic renewal at the time that the seller enters
into the contract with the consumer; and
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new text begin (2) give the consumer written notice of the automatic renewal clause and the
procedure for canceling the automatic renewal no less than 30 days and no more than 60
days before the last date on which the consumer may cancel the automatic renewal.
new text end

new text begin Subd. 3. new text end

new text begin Notice of automatic renewal. new text end

new text begin (a) Written notice provided under this
section must clearly and conspicuously disclose:
new text end

new text begin (1) that the contract will automatically renew if the consumer does not cancel the
automatic renewal;
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new text begin (2) the cancellation procedure; and
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new text begin (3) the dates during which the consumer may cancel the automatic renewal.
new text end

new text begin (b) A seller may opt to send to a consumer written notice under this section by
mail, certified mail, or personal service, or by including a statement in an invoice as
provided by paragraph (c).
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new text begin (c) Notice included in an invoice must be in red ink or in boldfaced type large
enough to be easily noticed.
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new text begin Subd. 4. new text end

new text begin Consumer's right to cancel. new text end

new text begin (a) A consumer may cancel the automatic
renewal of a contract at any time before the beginning of the automatic renewal period, at
no cost to the consumer, by following the procedure set out in the disclosure and notice
provided under this section.
new text end

new text begin (b) If the seller fails to provide either the disclosure or the written notice required
by subdivision 2, the consumer may cancel the automatic renewal by any reasonable
means at any time, at no cost to the consumer.
new text end

new text begin Subd. 5. new text end

new text begin Right of first refusal. new text end

new text begin A contract subject to this section must not require
that the consumer has to permit the seller to match any offer the consumer has received. A
provision in a contract that violates this subdivision is void and unenforceable.
new text end

new text begin Subd. 6. new text end

new text begin Enforcement. new text end

new text begin This section may be enforced by the attorney general
under section 8.31.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016, for contracts entered
into, modified, or renewed on or after that date.
new text end