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

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
 1   Providing for automatic renewal provisions in certain contracts
 2      for goods and services.
 3      The General Assembly of the Commonwealth of Pennsylvania
 4   hereby enacts as follows:
 5   Section 1.   Short title.
 6      This act shall be known and may be cited as the Contract
 7   Automatic Renewal Act.
 8   Section 2.   Definitions.
 9      The following words and phrases when used in this act shall
10   have the meanings given to them in this section unless the
11   context clearly indicates otherwise:
12      "Acquirer."   A person who purchases or acquires a contract or
13   business from a seller and becomes a party to a contract.
14      "Automatic renewal provision."   A provision of a contract
15   under which the contract is renewed for a specific period of
16   more than one month, if the renewal causes the contract to be in
17   effect for more than six months after the original effective
 1   date of the contract.
 2      "Consumer."     A person who purchases or leases services under
 3   a contract.
 4      "Contract."     A written agreement for the sale or lease of a
 5   service, between a consumer and a vendor over a fixed period of
 6   time or for a specified duration. The term does not include an
 7   agreement that allows a consumer to cancel the agreement at any
 8   time and to receive upon cancellation a pro rata refund of any
 9   unearned amounts paid by the consumer.
10      "Seller."     A person who sells or transfers a contract to an
11   acquirer.
12      "Vendor."     A person engaged in trade or commerce in this
13   Commonwealth who advertises, sells, leases or offers to sell or
14   lease a service to a consumer under a contract.
15   Section 3.     Contracts with automatic renewal provisions.
16      (a)   Disclosure required.--
17            (1)   A vendor that enters or attempts to enter into a
18      contract in this Commonwealth which includes an automatic
19      renewal provision shall disclose the automatic renewal
20      provision in the contract or contract offer in boldface of a
21      size no less than that of the surrounding text, but under no
22      circumstances in a font size less than 10 points.
23            (2)   A contract that is amended or modified after the
24      effective date of this paragraph shall be amended or modified
25      to include the disclosure specified in paragraph (1).
26      (b)   Notification upon sale or acquisition of business or
27   contract.--After the sale or acquisition of a business that is a
28   party to a contract with an automatic renewal clause, or after
29   the sale or acquisition of a contract with an automatic renewal
30   clause, the acquirer shall, within 60 days, notify the consumer

20250HB0045PN0024                    - 2 -
 1   of the sale. The notification shall clearly indicate the change
 2   in ownership of the business or contract and provide the
 3   consumer with an opportunity to opt out of the automatic renewal
 4   provision.
 5      (c)   Notification prior to contract renewal.--
 6            (1)   A vendor or acquirer that is party to a contract in
 7      this Commonwealth which automatically renews for a specified
 8      period of more than one month shall provide the consumer with
 9      written or electronic notification of the automatic renewal
10      provision. If the vendor has changed and is no longer the
11      original vendor, the notification shall include a statement
12      indicating the change.
13            (2)   The notification under this subsection shall be
14      provided to the consumer no less than 30 days nor more than
15      60 days before the cancellation deadline under the automatic
16      renewal provision. An acquirer shall have complied with the
17      requirement under this paragraph if a notification under
18      subsection (b) was provided at least 120 days before the
19      cancellation deadline under the automatic renewal provision.
20            (3)   For a contract that is scheduled to automatically
21      renew following the effective date of this paragraph, the
22      vendor shall provide the consumer with notification of the
23      automatic renewal in accordance with the requirements of this
24      section.
25      (d)   Contents of notice.--The notification required under
26   subsection (c) shall disclose clearly and conspicuously:
27            (1)   That unless the consumer cancels the contract before
28      the cancellation deadline, the contract will automatically
29      renew.
30            (2)   The cancellation deadline.

20250HB0045PN0024                    - 3 -
 1             (3)   The method by which the consumer may obtain details
 2      of the automatic renewal provision and cancellation
 3      procedure, whether by contacting the vendor at a specified
 4      telephone number or address, by referring to the contract or
 5      by any other method.
 6      (e)    Proof of notification.--A vendor must retain proof of
 7   the notification provided to a consumer subject to a contract
 8   with an automatic renewal provision. The proof of notification
 9   shall be retained by the vendor for six years following the
10   expiration of the term during which the notification was sent.
11   The proof of notification may be retained in an electronic
12   format.
13      (f)    Automatic renewal effective.--An automatic renewal
14   provision in a contract shall be valid unless the consumer gives
15   notice to the vendor to cancel the contract or unless the vendor
16   fails to comply with the requirements of this section.
17      (g)    Right of rescission.--A contract that contains an
18   automatic renewal provision in which the services have a sale
19   price of at least $25 and which are sold or contracted to be
20   sold to a consumer as a result of, or in connection with, a
21   contact with or call on the consumer at the consumer's residence
22   either in person or by telephone shall comply with the notice
23   provisions specified in section 7 of the act of December 17,
24   1968 (P.L.1224, No.387), known as the Unfair Trade Practices and
25   Consumer Protection Law.
26   Section 4.      Violations.
27      A vendor that fails to comply with the requirements of
28   section 3 is in violation of this act.
29   Section 5.      Void provisions.
30      An automatic renewal provision of a contract in violation of

20250HB0045PN0024                       - 4 -
 1   this act is void and unenforceable in this Commonwealth.
 2   Section 6.     Enforcement.
 3      A violation of this act shall constitute an unfair or
 4   deceptive trade or practice for purposes of the act of December
 5   17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices
 6   and Consumer Protection Law, and shall be subject to the penalty
 7   and enforcement provisions available to the Attorney General or
 8   a district attorney of that act.
 9   Section 7.     Applicability.
10      (a)   Contracts applicable.--Except as provided in subsection
11   (b), this act shall apply to contracts executed or renewed after
12   the effective date of this subsection.
13      (b)   Exceptions.--This act shall not apply to:
14            (1)   A lease subject to the act of April 6, 1951 (P.L.69,
15      No.20), known as The Landlord and Tenant Act of 1951.
16            (2)   A contract subject to the act of December 21, 1989
17      (P.L.672, No.87), known as the Health Club Act.
18            (3)   A person or entity providing service contracts as
19      defined in section 358 of the act of May 17, 1921 (P.L.682,
20      No.284), known as The Insurance Company Law of 1921, or an
21      affiliate of the person or entity.
22            (4)   A person or entity regulated by the Insurance
23      Department or an affiliate of the person or entity.
24            (5)   A contract subject to 66 Pa.C.S. Ch. 22 (relating to
25      natural gas competition).
26            (6)   A contract subject to 66 Pa.C.S. Ch. 28 (relating to
27      restructuring of electric utility industry).
28            (7)   A contract between a consumer and a bank, savings
29      association, credit union, trust company, a licensee subject
30      to 7 Pa.C.S. Ch. 61 (relating to mortgage loan industry

20250HB0045PN0024                    - 5 -
1      licensing and consumer protection) or an affiliate of any of
2      these businesses, including the sale, assignment or transfer
3      of a contract to any other business or affiliate.
4   Section 8.   Effective date.
5      This act shall take effect in 60 days.




20250HB0045PN0024                  - 6 -