Pennsylvania HB 45: An Act providing for automatic renewal provisions in certain contracts for goods and services.

Bill Text

PRINTER'S NO. 24
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 45
Session of
2025
INTRODUCED BY CONKLIN, RABB, McNEILL, NEILSON, SANCHEZ, PIELLI,
HOWARD, HILL-EVANS, DONAHUE, SCHLOSSBERG, KHAN, McANDREW,
HARKINS, WARREN, FREEMAN, DELLOSO AND ISAACSON,
JANUARY 10, 2025
REFERRED TO COMMITTEE ON COMMERCE, JANUARY 10, 2025
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 purchases or acquires a contract or
business from a seller and becomes a party to a contract.
"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 original effective
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date of the contract.
"Consumer." A person who purchases or leases services under
a contract.
"Contract." A written agreement for the sale or lease of a
service, between a consumer and a 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.
"Vendor." A person engaged in trade or commerce in this
Commonwealth who advertises, sells, leases or offers to sell or
lease a service to a consumer under a contract.
Section 3. Contracts with automatic renewal provisions.
(a) Disclosure required.--
(1) A vendor that enters or attempts to enter into a
contract in this Commonwealth 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
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 consumer
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of the sale. The notification shall clearly indicate the change
in ownership of the business or contract and provide the
consumer with an opportunity to opt out of the automatic renewal
provision.
(c) Notification prior to contract renewal.--
(1) A vendor or acquirer that is party to a contract in
this Commonwealth 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 vendor has changed and is no longer the
original vendor, the notification shall include a statement
indicating the change.
(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
vendor shall provide the consumer with notification of the
automatic renewal in accordance with the requirements of this
section.
(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.
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(3) The method by which the consumer may obtain details
of the automatic renewal provision and cancellation
procedure, whether by contacting the vendor at a specified
telephone number or address, by referring to the contract or
by any other method.
(e) Proof of notification.--A 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 vendor fo