Drafting and Enforcing Automatic Renewal Clauses | CLE Course

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Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
work Practice Area
Commercial Law

Date & Time

event Date
Tuesday, March 23, 2021
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
90 minutes

Credit Information

This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00

CLE

ALL

This CLE course 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.

Faculty

Michael P. Daly

Partner

Drinker Biddle & Reath, LLP

Mr. Daly has spent nearly twenty years defending, counseling, and advocating for clients that interact with consumers. His practice focuses on defending class actions and other complex cases, handling critical motions and appeals in adversarial and administrative matters, and maximizing the defensibility of marketing and enforceability of consumer contracts. He is a Vice-Chair of the firm's class actions practice; the senior editor of its TCPA Blog; and a leader of its TCPA, Consumer Contracts, and Retail Industry Teams.

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Antoinette Snodgrass

Attorney

Faegre Drinker Biddle & Reath LLP

Ms. Snodgrass has a diverse law practice that includes a variety of litigation cases, including breach of contract actions, class actions and products liability. Additionally, a significant portion of her matters involve environmental disputes, including both environmental litigation and remediation. Finally, Ms. Snodgrass also handles other regulatory matters such as securities investigations and litigation.

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Matthew J. Adler

Attorney

Faegre Drinker Biddle & Reath LLP

Mr. Adler is a trusted advocate and counselor who litigates complex commercial disputes and putative class actions for companies in the retail, technology, insurance, automotive, construction and telecommunications industries. He is known to be a persuasive writer and even-keeled problem-solver who provides practical, cost-effective solutions for his clients. Mr. Adler has defended numerous class actions, in state and federal court, involving claims of false advertising, fraud, breach of contract, breach of warranty and alleged violations of the Telephone Consumer Protection Act and of California’s consumer protection statutes, the Unfair Competition Law, the False Advertising Law, and the Consumers Legal Remedies Act.

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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.

Outline

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
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
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