23.0332.01000
Sixty-eighth
Legislative Assembly HOUSE BILL NO. 1228
of North Dakota
Introduced by
Representatives D. Ruby, Klemin, Louser, Prichard, Thomas, VanWinkle
Senators Bekkedahl, Hogue, Klein, J. Roers, Wanzek
1 A BILL for an Act to amend and reenact sections 51-37-01, 51-37-02, and 51-37-04, relating to
2 the use of certain marketing practices involving an agreement containing a provision for
3 automatic renewal; and to provide for application.
4 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
5 SECTION 1. AMENDMENT. Section 51-37-01 of the North Dakota Century Code is
6 amended and reenacted as follows:
7 51-37-01. Definitions.
8 As used in this chapter:
9 1. "Agreement" means a written agreement between a customer and a party acting in the
10 usual course of business in which a customer borrows, buys, leases, or obtains
11 merchandise, personal property, real property, or services for valuable consideration.
12 2. "Automatic renewal" means a plan or arrangement in which a paid subscription or
13 purchasing agreement is automatically renewed for a period of more than one month
14 at the end of a definite period for a subsequent period.
15 2.3. "Clear and conspicuous" means in a larger type than the surrounding text, in
16 contrasting type, font, or color to the surrounding text of the same size, or set off from
17 the surrounding text of the same size or symbols or other marks, in a manner that
18 clearly calls attention to the language and makes the language readily apparent,
19 readable, and understandable to the person to which the language is disclosed. In the
20 case of an audio disclosure, "clear and conspicuous" means in a volume and cadence
21 sufficient to be readily audible and understandable. A statement that contradicts or is
22 inconsistent with any other information with which the statement is presented is not
23 clear and conspicuous.
Page No. 1 23.0332.01000
Sixty-eighth
Legislative Assembly
1 SECTION 2. AMENDMENT. Section 51-37-02 of the North Dakota Century Code is
2 amended and reenacted as follows:
3 51-37-02. Use of automatic renewal.
4 1. A person that sells or offers to sell merchandise or a service for a specified period
5 under an agreement containing a provision for automatic renewal shall:
6 a. Present the terms of the automatic renewal offer in a clear and conspicuous
7 manner before a subscription or purchasing agreement is fulfilled and in proximity
8 to the offer;
9 b. Provide an acknowledgment that includes the terms of the automatic renewal
10 offer and information regarding how to cancel in a manner which is capable of
11 being retained by the buyer; and
12 c. Provide a cost-effective, timely, and simple procedure for cancellation which must
13 be described in the acknowledgment required by subdivision b.
14 2. A person that sells or offers to sell merchandise or a service for a specified period
15 under an agreement that contains a provision for automatic renewal for a period of
16 more than six months at the end of the time period specified in the agreement shall
17 provide a clear and conspicuous written notice to the buyer stating the buyer may
18 cancel the contract and avoid automatic renewal.
19 a. The written notice must be provided by:
20 (1) First-class mail;
21 (2) Electronic mail; or
22 (3) Any easily accessible form of communication, including text message or a
23 mobile application, if the consumer specifically authorizes the person to
24 provide notice in such form.
25 b. The written notice must include the procedure for canceling and must be given at
26 least thirty days and not more than sixty days before the date upon which the
27 agreement will be renewed or the expiration of the period for cancellation.
28 3. If there is a material change in the terms of an agreement that contains a provision for
29 automatic renewal, the seller shall provide the buyer with clear and conspicuous notice
30 of the material change and provide information regarding how to cancel in a manner
31 which is capable of being retained by the buyer.
Page No. 2 23.0332.01000
Sixty-eighth
Legislative Assembly
1 4. A person that sells or offers to sell merchandise or a service for a specified period
2 under an agreement that contains a provision for automatic renewal may not make or
3 submit any charge to a buyer's credit card, debit card, bank account, account with a
4 third party, or other financial account, unless the person has complied with the
5 requirements of subsection 1 and obtained the buyer's affirmative consent to the
6 agreement containing the terms of the automatic renewal.
7 5. The renewal period in a provision for automatic renewal of an agreement for sale of
8 merchandise may not exceed twelve months.
9 SECTION 3. AMENDMENT. Section 51-37-04 of the North Dakota Century Code is
10 amended and reenacted as follows:
11 51-37-04. Remedies.
12 An agreement for sale of merchandise in violation of this chapter is unenforceable and void.
13 If a person sends merchandise or provides a service as a result of an automatic renewal of
14 agreement without complying with the requirements of section 51-37-02 or sends merchandise
15 or provides a service after a buyer undertook an affirmative act to cancel or otherwise avoid
16 charges, the merchandise or service is considered to be an unconditional gift to the buyer who
17 may dispose of the gift in any manner the buyer sees fit without any obligation to the person.
18 SECTION 4. APPLICATION. This Act applies to contracts entered after July 31, 2023.
Page No. 3 23.0332.01000
Statutes affected: INTRODUCED: 51-37-01, 51-37-02, 51-37-04
Enrollment: 51-37-01, 51-37-02, 51-37-04