Senate Bill No. 5–Senator O’Donnell

Prefiled January 11, 2001

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Referred to Committee on Commerce and Labor

SUMMARY—Provides that provisions for automatic renewal in service contracts are unenforceable except under certain circumstances. (BDR 52‑286)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

AN ACT relating to service contracts; providing that a provision for automatic renewal in such a contract is unenforceable against the person receiving the service except under certain circumstances; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 597 of NRS is hereby amended by adding thereto a

1-2 new section to read as follows:

1-3 1. Except as otherwise provided in subsection 2, a provision for

1-4 automatic renewal in a service contract is not enforceable against the

1-5 person receiving the service unless:

1-6 (a) The provision for automatic renewal is clearly and conspicuously

1-7 set forth in the service contract; and

1-8 (b) The person furnishing the service gives written notice to the

1-9 person receiving the service of the existence of the provision for

1-10 automatic renewal in the service contract and the notice is:

1-11 (1) Served on the person receiving the service personally or by

1-12 certified mail; and

1-13 (2) Received by him at least 15 days and not more than 30 days

1-14 before the date by which he must act to avoid the automatic renewal of

1-15 the service contract.

1-16 2. This section does not apply to a service contract in which the

1-17 additional period specified in the provision for automatic renewal is 1

1-18 month or less.

1-19 3. As used in this section:

2-1 (a) “Person” includes a government, governmental agency or political

2-2 subdivision of a government.

2-3 (b) “Provision for automatic renewal” means a provision in a service

2-4 contract which provides that, at the expiration of the term of the contract,

2-5 the contract will be renewed for a specified additional period unless the

2-6 person receiving the service gives notice to the person furnishing the

2-7 service of his intention to terminate the contract.

2-8 (c) “Service contract” means a contract for the provision of any

2-9 service, including, without limitation, Internet service or the

2-10 maintenance or repair of real or personal property, for the duration of a

2-11 definite term.

2-12 Sec. 2. The amendatory provisions of this act do not apply to contracts

2-13 entered into before the effective date of this act.

2-14 Sec. 3. This act becomes effective upon passage and approval.

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