2007 Regular Session
To: Judiciary A
By: Representative Ward
AN ACT TO PROHIBIT THE USE OF AUTOMATIC RENEWAL CLAUSE IN CONTRACTS; TO EXEMPT CERTAIN PUBLIC CONTRACTS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Except as otherwise provided in this section, any contract, entered into after the effective date of this section, for the sale, service or lease of manufactured goods or commodities or for the providing of services shall not contain a provision that the contract shall be automatically renewed at the end of a certain period of time unless such contract provides that the party providing the goods, commodities or services shall be required to send a written notice to all parties subject to the contract. The party providing the goods, commodities or services shall send such a notice to all other parties to the contract at least thirty (30) days, but not more than sixty (60) days, before the date of the renewal of the contract. Such notice shall state if the terms of the contract subject to renewal are the same as the previous contract period or if any terms in the contract are changed. The contract may be terminated at the end of the contract period by any party if the party sends a written notice of the termination of the contract to the other parties subject to the contract before the renewal date of the contract. The contract may provide that the contract may be automatically renewed on the terms provided in the renewal notice if no party to the contract sends a notice of termination of the contract prior to the date of renewal. The notification requirements required in contracts pursuant to this section may be specifically waived within the contract for a specified period of time by placing a waiver within the contract for a specified period of time by placing a waiver in a prominent place in the written contract, but such a waiver shall only be valid where the party receiving the goods or services has indicated by signature or initials on that portion of the contract that such party has waived the notification requirements of this section. In addition, the provisions of this section shall not apply to any contract with the state or any political subdivision of this state, to any contract with a public institution of education in this state or to parties of automatic rollover contracts subject to cancellation at any time without penalty or parties to contracts which provide for prorated refunds in the event of cancellation.
(2) Any automatic renewal provision in a contract that violates the provisions of subsection (1) of this section is against public policy and is void and unenforceable.
SECTION 2. This act shall take effect and be in force from and after July 1, 2007.