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Automatic Renewal Terms in Business-to-Business and Consumer Contracts: Enhanced FTC and State Scrutiny

Proposed New Rule Requires Clear and Conspicuous Disclosures, Affirmative Consent, and Easy Cancellation Procedures

Recording of a 90-minute CLE video webinar with Q&A

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Conducted on Tuesday, December 12, 2023

Recorded event now available

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This CLE webinar will discuss the FTC's proposed sweeping amendments governing negative option (also known as automatic renewal) plans, continuous contracts, and free (or discounted) trials. The panel will discuss the scope of these proposed new amendments as well as state laws relating to negative option requirements and the legal obligations and risks businesses need to be aware of going forward to avoid FTC and state scrutiny.


Over the last few years, several states have passed new automatic renewal laws (ARLs) that regulate continuing or renewing contracts. Other states have likewise amended existing ARLs to add detailed restrictions and requirements.

In line with the activity at the state level, earlier this year, the FTC released a notice of proposed rulemaking to overhaul the agency's rule regarding negative option plans--contracts and subscriptions for goods and services that automatically renew if the consumer takes no action. The proposed rule would prohibit certain types of misrepresentations, require certain disclosures and affirmative consent, and require an easy means of cancellation, with very limited opportunities for companies to save the transaction.

Violations of the proposed new rule would allow the FTC to seek consumer redress and civil monetary penalties of more than $50,000 per violation.

Based on the state ARLs already in place and the FTC's proposed new rule, companies that sell products or services using negative options should conduct a review of their disclosures, contract terms, consent processes, cancellation procedures, and the like to prepare for these new amendments and to mitigate the risk of FTC or state scrutiny.

Listen as our authoritative panel discusses state ARLs and the FTC's proposed new rule and what they mean for businesses that use negative option terms in their contracts.



  1. Overview of state ARLs
  2. Overview of the FTC's proposed new rule
  3. Scope and applicability of the FTC's proposed rule
    1. Consumer contracts
    2. Business-to-business contracts
  4. Key provisions of state ARLs and the FTC's proposed new rule
    1. Clear and conspicuous material disclosures
    2. Consent
    3. Renewal reminders
    4. Cancellation
    5. Misrepresentation
    6. Enforcement
  5. Penalties for violations of the FTC's proposed new rule
  6. Actions businesses should take now in light of the increased scrutiny on automatic renewal contracts
  7. Key takeaways


The panel will review these and other key issues:

  • What are the key provisions of automatic renewal requirements and the FTC's proposed new amendments?
  • Will the FTC's proposed new rule preempt state laws relating to negative option requirements?
  • How will the FTC's proposed new rule impact consumer and business-to-business transactions?
  • What should businesses do now in light of the new amendments and the increased scrutiny of automatic renewal contracts?


Jaeger, Michael
Michael Jaeger

Mayer Brown

Mr. Jaeger represents clients in class actions and complex litigation in state and federal courts across the...  |  Read More

Singer, Paul
Paul L. Singer

Kelley Drye & Warren

Mr. Singer spent over two decades in the Texas Attorney General’s office, spearheading its consumer protection,...  |  Read More

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