A bill for an act
relating to contracts; defining indefinite subscription agreement and related terms;
regulating certain contracts subject to automatic renewal clauses or continuous
service; requiring seller notice to consumers; providing for consumer rights in
connection with the termination of certain contracts; providing civil penalties;
proposing coding for new law in Minnesota Statutes, chapter 325G.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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For purposes of sections 325G.56 to 325G.62, the terms defined
in this section have the meanings given them.
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"Automatic renewal" means a plan or arrangement in
which a subscription or purchasing agreement is automatically renewed at the end of a
definite term for a subsequent term.
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"Clear and conspicuous" means the display of text in
a manner that clearly calls attention to the text, including but not limited to displaying the
text: (1) in larger type than the surrounding text; (2) in contrasting type, font, or color to
the surrounding text of the same size; or (3) set off from the surrounding text of the same
size by symbols or other marks. In the case of an audio disclosure, clear and conspicuous
means in a volume and cadence sufficient to be readily audible and understandable.
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"Consumer" means any individual who seeks or acquires, by
purchase or lease, any goods, services, money, or credit for personal, family, or household
purposes.
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"Continuous service" means a plan or arrangement in
which a subscription or purchasing agreement continues until the consumer terminates the
agreement.
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"Indefinite subscription agreement" means
a subscription or purchasing agreement:
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(1) between a seller and a consumer in Minnesota; and
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(2) subject to automatic renewal or continuous service.
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Indefinite subscription agreements include but are not limited to contracts, as defined in
section 325G.23, subdivision 3, subject to automatic renewal or continuous service.
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"Offer terms" means the following disclosures:
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(1) the indefinite subscription agreement continues until the consumer terminates the
agreement;
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(2) the description of the cancellation policy that applies to the indefinite subscription
agreement;
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(3) the recurring charges that are charged to the consumer's credit or debit card or payment
account with a third party as part of the plan or arrangement and that the amount of the
charge may change, if that is the case, and the amount to which the charge changes, if
known;
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(4) the length of the automatic renewal term or that the service is continuous, unless the
length of the term is definite and chosen by the consumer; and
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(5) the minimum purchase obligation, if any.
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"Seller" means: (1) a seller, lessor, licensor, or professional who
advertises, solicits, or engages in consumer transactions; or (2) a manufacturer, distributor,
or licensor who advertises and sells, leases, or licenses goods or services to be resold, leased,
or sublicensed by other persons in consumer transactions.
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A seller making an offer for an indefinite subscription
agreement must, before the consumer accepts the offer, present the offer terms: (1) in a
clear and conspicuous manner to the consumer; and (2) in visual proximity or, in the case
of an offer conveyed by voice, in temporal proximity to the offer's proposal.
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A seller making an offer for an
indefinite subscription agreement must, in a timely manner after the consumer accepts the
offer, provide the consumer with confirmation of the consumer's acceptance of the offer.
The confirmation must be provided in a manner that is capable of being retained by the
consumer and must include the following:
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(1) the offer terms;
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(2) if the offer includes a free trial, information indicating how to cancel the free trial
before the consumer pays or becomes obligated to pay for any goods or services in connection
with the free trial; and
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(3) the following options to terminate the indefinite subscription agreement, which
options must be easy to use, expeditious, and accessible for all consumers:
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(i) a toll-free telephone number;
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(ii) an email address;
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(iii) a postal address;
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(iv) if a seller makes offers for an indefinite subscription agreement through an online
website, a clear and conspicuous online option; and
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(v) if a consumer enters into the indefinite subscription agreement through any means
other than those described in items (i) to (iv), an option substantially similar to, as easy to
use, and as accessible as the initial means used for the consumer to accept the agreement.
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(a) Upon a material change in the terms of the indefinite
subscription agreement, the seller must provide to the consumer in a timely manner, and in
any case prior to the implementation of the material change, a clear and conspicuous notice
of the material change and provide information indi