My Legal Concerns

    The list of states that are enacting laws affecting the automatic renewal in contracts is expanding and you need to be certain that your contracts and your business practices incorporate the latest requirements.  Failing to comply can have severe consequences well beyond the single subscriber contract you are seeking to enforce.  Check your state law at http://www.kirschenbaumesq.com/autorenewal.htm

    In 2006 Time Inc, publisher of Time Magazine, was sued by the Attorney General of Iowa for deceptive business practices involving automatic renewal of magazine subscriptions.  Iowa had and has no law regarding automatic renewal.  Yet the AG's office took the position that Time Inc engaged in deceptive business practices, which was and is addressed in all states.  Twenty-three additional states joined in the Iowa action.  You can check the press release from the Iowa AG's office at http://www.kirschenbaumesq.com/iowa_department_of_justice.html.

    These states joined in : AK, CA, DE, FL, HA, IL, IA, ME, MD, MI, MO, NV, NJ, NM, NY, OH, OR, PA, TN, TX, VA, WV, and WI.

    It is significant to note that most of these states, including Iowa, do not have laws prohibiting or addressing automatic renewal clauses. 

    Time Inc had to pay 4.3 million dollars to its customers and another 4.5 million dollars to the states.  Most of you don't have to worry about fines like that because you'll be long out of business, but those of you who would like to stay in business should pay heed. 

    Your contracts should not have automatic renewal beyond month to month unless your state's automatic renewal law specifically addresses the issue.  Pennsylvania has just enacted legislation that addresses automatic renewal, so I do provide for a 3 year renewal in PA.  However, in all other states my contracts provide for month to month renewal, which generally suffices in states with legislation and those states that have no legislation. 

    Update your contracts at www.alarmcontracts.com.  One of the ways we stay on top of new laws is through your participation on this forum.  Please let me know of developments that come to your attention.