PRINTER'S NO. 2871
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 a contract or business
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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
effect for more than six months after the effective date of the
original contract.
"Consumer." A person who receives goods, services,
maintenance or repairs under a contract.
"Contract." A written agreement for the sale of a good or
performance of a service, including maintenance or repair
service, between a consumer and a seller 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 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 that enters or attempts to enter into a
contract in this Commonwealth that 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 of business or contract.--After
the sale of a business that is a party to a contract with an
automatic renewal clause, or after the sale of a contract with
an automatic renewal clause, the acquirer shall, within 60 days,
notify the customer of the sale. The notification shall clearly
20240HB2196PN2871 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
indicate the change in ownership of the business or contract and
provide the customer with an opportunity to opt out of the
automatic renewal provision.
(c) Notification prior to contract renewal.--
(1) A seller or acquirer that has entered into a
contract in this Commonwealth that 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 has changed and is
no longer the original seller, 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 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.
20240HB2196PN2871 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(3) The method by which the consumer may obtain details
of the automatic renewal provision and cancellation
procedure, whether by contacting the seller at a specified
telephone number or address, by referring to the contract or
by any other method.
(e) Proof of notification.--A seller 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 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 to cancel the
contract or unless the seller 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,
1968 (P.L.1224, No.387), known as the Unfair Trade Practices and
Consumer Protection Law.
Section 4. Violations.
A seller that fails to comply with the requirements of
section 3 is in violation of this act.
Section 5. Void provisions.
20240HB2196PN2871 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
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.
Section 8. Effective date.
This act shall take effect in 60 days.
20240HB2196PN2871 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19