Amended in Senate May 10, 2016

Senate BillNo. 1428


Introduced by Senator Hernandez

February 19, 2016


An act to add Sectionbegin delete 1683end deletebegin insert 1702end insert to the Civil Code, relating tobegin delete onlineend delete contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 1428, as amended, Hernandez. begin deleteOnline contracts. end deletebegin insertContracts: automatic renewal provisions.end insert

Existing law generally regulates formation and enforcement of contracts, including how a contract is extinguished.

begin delete

This bill would require a contract that is entered into online that includes a provision for the automatic renewal of the term of the contract to include a provision that allows a party to terminate the contract in the same manner as the contract was entered into.

end delete
begin insert

Existing law makes it unlawful for any business making an automatic renewal or continuous service offer to a consumer in this state to, among other things, fail to present the automatic renewal or continuous service offer terms in a clear and conspicuous manner, charge the consumer for an automatic renewal or continuous service without first obtaining the consumer’s affirmative consent, and to fail to provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer.

end insert
begin insert

This bill would require a business that makes an automatic renewal or continuous service offer that is subject to the above-described requirements to provide a consumer with an email address or option on the business’ Internet Web site for the consumer to communicate his or her decision to not renew the subscription or purchasing agreement. The bill would also require, within 24 hours of receipt of a consumer’s communication to not renew the subscription or purchasing agreement, the business to notify the consumer of receipt of the consumer’s communication. The bill would require the business to honor this decision.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1702 is added to the end insertbegin insertCivil Codeend insertbegin insert, to read:end insert

begin insert
2

begin insert1702.end insert  

A business that makes an automatic renewal or
3continuous service offer that is subject to Article 9 (commencing
4with Section 17600) of Chapter 1 of Part 3 of Division 7 of the
5Business and Professions Code shall provide a consumer with an
6email address or option on the business’ Internet Web site for the
7consumer to communicate his or her decision to not renew the
8subscription or purchasing agreement. Within 24 hours of receipt
9of a consumer’s communication to not renew the subscription or
10purchasing agreement, the business shall notify the consumer of
11receipt of the consumer’s communication. The business shall honor
12the consumer’s decision to not renew. The definitions of “automatic
13renewal,” “consumer,” and “continuous service” provided in
14Section 17601 of the Business and Professions Code shall apply
15to this section.

end insert
begin delete16

SECTION 1.  

Section 1683 is added to the Civil Code, to read:

17

1683.  

A contract that is entered into online that includes a
18provision for the automatic renewal of the term of the contract
19shall also include a provision that allows a party to terminate the
20contract in the same manner as the contract was entered into.

end delete


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