SLS 10RS-3294 ENGROSSED
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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. 802 (Substitute of Senate Bill No. 618 by Senator
McPherson)
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 disclosure of procedures regarding cancellation of such contracts; to3
provide for exceptions upon failure to notify consumers; to provide for applicability4
and exceptions; and to provide for related 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. Contracts with automatic renewal clauses8
A. Any person, firm, or corporation engaged in commerce that sells,9
leases, or offers to sell or lease, any products or services to a consumer pursuant10
to a contract, where the contract automatically renews unless the consumer11
cancels the contract, shall disclose the automatic renewal clause clearly and12
conspicuously in the contract or contract offer.13
B. Any person, firm, or corporation engaged in commerce that sells,14
leases, or offers to sell or lease, any products or services to a consumer pursuant15
to a contract, where the contract automatically renews unless the consumer16
cancels the contract, shall disclose clearly and conspicuously how to cancel the17 SB NO. 802
SLS 10RS-3294 ENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
contract in the initial contract, contract offer, or with delivery of products or1
services.2
C. A person, firm, or corporation that fails to comply with the3
requirements of this Section is in violation of this Section unless the person,4
firm, or corporation demonstrates that all of the following are its routine5
business practice:6
(1) It has established and implemented written procedures to comply7
with this Section and enforces compliance with the procedures.8
(2) Any failure to comply with this Section is the result of error.9
(3) Where an error has caused the failure to comply with this Section,10
it provides a full refund or credit for all amounts billed to or paid by the11
consumer from the date of the renewal until the date of the termination of the12
contract, or the date of the subsequent notice of renewal, whichever occurs first.13
D. The provisions of this Section shall not apply to the following:14
(1) The Louisiana Rental-Purchase Agreement Act as provided in R.S.15
9:3351 through 3362.16
(2) Banks, trust companies, savings and loan associations, savings banks,17
or credit unions licensed or organized under the laws of any state or the United18
States, or any foreign bank maintaining a branch or agency licensed under the19
laws of the United States, or any subsidiary or affiliate thereof.20
(3) Insurers licensed under Title 22 of the Louisiana Revised Statutes of21
1950.22
(4) A contract entered into before January 1, 2011.23
(5) A contract that allows for cancellation by the consumer by written24
notice within thirty days or within one month, after the initial period has25
expired.26
E. Any contract automatically renewed in violation of this Section shall27
revert to a thirty day renewal contract in accordance with the same terms.28 SB NO. 802
SLS 10RS-3294 ENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Camille Sebastien Perry.
DIGEST
McPherson (SB 802)
Proposed law requires any person, firm, or corporation engaged in commerce that sells,
leases, or offers to sell or lease, any products or services to a consumer pursuant to a
contract, where the contract automatically renews unless the consumer cancels the contract,
to disclose the automatic renewal clause clearly and conspicuously in the contract or contract
offer and to disclose clearly and conspicuously how to cancel the contract in the initial
contract, contract offer, or with delivery of products or services.
Proposed law provides that a person, firm, or corporation that fails to comply with the
requirements of proposed law is in violation of these requirements unless the person, firm,
or corporation demonstrates that all of the following are its routine business practice:
(1)It has established and implemented written procedures to comply with proposed law
and enforces compliance with the procedures.
(2)Any failure to comply is the result of error.
(3)Where an error has caused the failure to comply, it provides a full refund or credit
for all amounts billed to or paid by the consumer from the date of the renewal until
the date of the termination of the contract, or the date of the subsequent notice of
renewal, whichever occurs first.
Proposed law provides that the provisions of proposed law shall not apply to the following:
(1)The Louisiana Rental-Purchase Agreement Act as provided in R.S. 9:3351 through
3362.
(2)Banks, trust companies, savings and loan associations, savings banks, or credit
unions licensed or organized under the laws of any state or the United States, or any
foreign bank maintaining a branch or agency licensed under the laws of the United
States, or any subsidiary or affiliate thereof.
(3)Insurers licensed under Title 22 of the Louisiana Revised Statutes of 1950.
(4)A contract entered into before January 1, 2011.
(5)A contract that allows for cancellation by the consumer by written notice within
thirty days or within one month, after the initial period has expired.
Proposed law provides that any contract automatically renewed in violation of proposed law
shall revert to a thirty day renewal contract in accordance with the same terms.
Effective on August 15, 2010.
(Adds R.S. 9:2716)