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Capital IconMinnesota Legislature

HF 209

as introduced - 90th Legislature (2017 - 2018) Posted on 01/13/2017 10:18am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 01/12/2017

Current Version - as introduced

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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
new text end

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:
new text end

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
new text end

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;
new text end

new text begin (2) the cancellation procedure; and
new text end

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).
new text end

new text begin (c) Notice included in an invoice must be in red ink or in boldfaced type large enough
to be easily noticed.
new text end

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, 2017, for contracts entered
into, modified, or renewed on or after that date.
new text end