HB405 Alabama 2017 Session

Summary

Primary Sponsor

Randy WoodRepresentative

Republican

Session

Regular Session 2017

Title

Contracts, regulating automatic renewal of certain contracts, exemptions

Summary

HB405 would require clear notice and disclosure of automatic renewal provisions in service contracts and make renewal terms unenforceable if notice is not provided, with exemptions for certain entities.

What This Bill Does

The bill requires sellers to clearly disclose any automatic renewal provision in the contract or offer, using at least 14-point bold type. For service contracts lasting 12 months or more that renew automatically for more than one month, the seller must provide written or electronic notice to the consumer 30 to 60 days before the renewal deadline, detailing that renewal will occur unless canceled and how to cancel or obtain more information. If the required notice is not provided, the automatic renewal provision becomes void and unenforceable. Some entities are exempt from these requirements, including certain financial institutions, banks, utilities, and government-related entities or their subsidiaries.

Who It Affects

• Consumers who hold service contracts: they will be protected by required renewal notices and can cancel renewals; if notice is not provided, the renewal terms may be void.
• Sellers or service contract providers: they must disclose renewal terms clearly and send renewal notices; noncompliance could render renewal provisions unenforceable; exemptions may apply to certain entities.
• Exempt groups: financial institutions, depository institutions, foreign banks, utilities, and certain government-related entities or their subsidiaries are not subject to these requirements.

Key Provisions

• Defines automatic renewal provision, consumer, seller, and service contract.
• Requires clear disclosure of the automatic renewal provision in at least 14-point bold type in the contract or offer.
• For 12-month-or-longer contracts that automatically renew for more than one month, requires written or electronic notice 30 to 60 days before the renewal deadline, with details on renewal and cancellation procedures.
• Lists exemptions for financial institutions, banks, foreign banks, utilities, and government-related entities or their subsidiaries.
• A violation makes the automatic renewal provision void and unenforceable.
• Effective date: first day of the third month after the bill is passed and approved.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contracts