Drafting and Enforcing Automatic Renewal Clauses: Continuous Contracts and Subscription Services

Consumer Protections, Penalties, Trends in California and New York and More

A live 90-minute CLE video webinar with interactive Q&A


Tuesday, March 23, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, February 26, 2021

or call 1-800-926-7926

This CLE webinar will provide advice on drafting and enforcing automatic renewal provisions in subscription agreements and other continuous contracts. In addition to looking at nationwide trends, the panel will address the recent New York law that went into effect on Feb. 9, 2021, joining an increasing number of laws imposing strict demands on automatically renewing and continuous contracts.

Description

The recent New York law related to automatically renewing contracts is much more expansive than the prior law limited to only contracts for "service, maintenance or repair." The new law resembles the California automatic renewal law that has spawned a considerable amount of class action litigation and follows the national trend of regulating such contracts.

More than half of the states currently have restrictions on auto-renewal clauses in consumer contracts. Automatic renewals can benefit both customers and businesses; customers enjoy having their favorite products or services delivered to them automatically and businesses benefit from the predictable delivery of their products and services. States and regulators seek to ensure that online retailers and service providers will not misuse automatic renewals and fail to provide consumers with adequate disclosures or an easy mechanism to cancel their subscriptions before being charged again.

Counsel must be aware of differing state laws and advise businesses on restructuring their current automatic renewal processes in every state in which they operate. Businesses must consider the additional consent requirements and update their systems so that customers are not automatically billed until the business receives all the opt-ins required to process the transaction.

Most state regulations include significant penalties for noncompliance. Some states levy traditional fines that can total millions of dollars due to the nature of subscriptions and violations. Other states allow consumers that receive goods or services from businesses that fail to comply to keep the product or services as a gift with no payment due.

Listen as our expert panel provides a detailed overview of the automatic renewal restrictions in New York, California, and other related states. The panel will advise on best practices in drafting provisions and managing contracts to ensure nationwide compliance.

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Outline

  1. A Primer on automatic renewal laws
    1. Automatic renewals
    2. Continuous service contracts
    3. Overview of federal and state regulation:
      1. ROSCA
      2. Broad state laws
      3. Narrow state laws
      4. Common exemptions
      5. Other scope questions
  2. Drafting automatic renewal clauses
    1. Nationwide vs. state-by-state vs. hybrid approaches
    2. Key considerations:
      1. Affirmative consent and double opt-ins
      2. Clear and conspicuous notice
      3. Visually proximate notice
      4. Acknowledgments
      5. Free trials
      6. Cancellation rights
      7. Renewal reminders
      8. Changes to terms
  3. Private and public enforcement risks
    1. Notable AG actions
    2. Notable class actions
    3. Notable settlements
    4. Safe harbors
    5. Remedies:
      1. Restitution
      2. “Unconditional gifts”
      3. Civil penalties

Benefits

The panel will review these and other relevant issues:

  • How does the new NY automatic renewal law affect consumer contracts?
  • How does the new NY law vary from other state automatic renewal laws?
  • What is the status of class actions filed under state automatic renewal laws?
  • What are the best practices for drafting automatically renewing contracts?

Faculty

Adler, Matthew
Matthew J. Adler

Attorney
Faegre Drinker Biddle & Reath

Mr. Adler is a trusted advocate and counselor who litigates complex commercial disputes and putative class actions for...  |  Read More

Daly, Michael
Michael P. Daly

Partner
Faegre Drinker Biddle & Reath

Mr. Daly has spent two decades defending, counseling, and championing clients that interact with consumers. His...  |  Read More

Snodgrass, Antoinette
Antoinette Snodgrass

Attorney
Faegre Drinker Biddle & Reath

Ms. Snodgrass has a diverse law practice that includes a variety of litigation cases, including breach of contract...  |  Read More

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