SLS 10RS-590 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2010
SENATE BILL NO. 618
BY SENATOR MCPHERSON
PUBLIC CONTRACTS. Provides relative to the automatic renewal of contracts if the
consumer is notified and given an opportunity to cancel. (8/15/10)
AN ACT1
To enact R.S. 9:2716, relative to contracts; to provide for automatic renewal of contracts;2
to provide for the termination of such contracts; to provide for cancelling contracts3
electronically using the Internet; to provide for exceptions; and to provide for related4
matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 9:2716 is hereby enacted to read as follows: 7
ยง2716. Automatic renewal of contracts8
A.(1)(a) A contract may contain an automatic renewal clause; however,9
ninety days prior to the expiration of the contract, the obligee shall provide10
written notification to the obligor of the automatic renewal and the right of the11
obligor to cancel the contract. The notice to the obligor shall be clearly located12
within the periodic billing statement received by the obligor under the contract13
in clear, unambiguous language in conspicuous type on the billing statement14
and shall inform the obligor of the time limit to cancel the contract. If there is15
no periodic billing statement, a separate written notification to the obligor in16
clear, unambiguous, conspicuous type shall be mailed to the obligor.17 SB NO. 618
SLS 10RS-590 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(b) "Conspicuous type" means type in boldfaced capital letters no1
smaller than the largest type, exclusive of headings, on the page on which it2
appears and, in all cases, at least 10-point type. The conspicuous type must be3
separated on all sides from other type and print.4
(2)(a) The obligor shall have a minimum of thirty days from receipt of5
the periodic billing statement or the separate written notification to the obligor6
with the notification required by Paragraph (1) of this Subsection to cancel in7
writing the automatic renewal of such contract.8
(b) If the contract was entered into by the parties electronically through9
the Internet, the cancellation of the automatic renewal may be completed10
electronically using the Internet.11
B. Any contract automatically renewed in violation of this Section shall12
be null and void.13
C. The provisions of this Section shall only apply to contracts with a14
term of one year or longer.15
D. The provisions of this Section shall not apply to the Louisiana Rental-16
Purchase Agreement Act as provided in R.S. 9:3351 through 3362.17
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Christopher D. Adams.
DIGEST
Proposed law provides a contract may contain an automatic renewal clause if the consumer
is notified and given an opportunity to cancel.
Proposed law authorizes automatic renewal clauses but requires the obligee to provide
written notification to the obligor of the automatic renewal and the right of the obligor to
cancel the contract 90 days prior to the expiration of the contract. The notice to the obligor
shall be clearly located within the periodic billing statement received by the obligor under
the contract in clear, unambiguous language in conspicuous type on the billing statement and
shall inform the obligor of the time limit to cancel the contract. If there is no periodic billing
statement, a separate written notification to the obligor in clear, unambiguous, conspicuous
type must be mailed to the obligor.
"Conspicuous type" is defined as type in boldfaced capital letters no smaller than the largest
type, exclusive of headings, on the page on which it appears and, in all cases, at least
10-point type. It must be separated on all sides from other type and print.
The obligor has a minimum of 30 days from receipt of the periodic billing statement or the
separate written notification to cancel in writing the automatic renewal of the contract. SB NO. 618
SLS 10RS-590 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that if the contract was entered into by the parties electronically
through the Internet, the cancellation of the automatic renewal may be done electronically
using the Internet.
Proposed law provides that a contract automatically renewed in violation of proposed law
will be null and void.
Proposed law applies to contracts with a term of one year or longer
Proposed law provides that the provisions of proposed law will not apply to the Louisiana
Rental-Purchase Agreement Act.
Effective on August 15, 2010.
(Adds R.S. 9:2716)