# Title 51 — Sales and Exchanges

## Chapter 51-37 — Customer Contract Clauses and Automatic Renewals

### § 51-37-01. Definitions.

As used in this chapter:
1. "Agreement" means a written agreement between a customer and a party acting in the
usual course of business in which a customer borrows, buys, leases, or obtains
merchandise, personal property, real property, or services for valuable consideration.
2. "Automatic renewal" means a plan or arrangement in which a paid subscription or
purchasing agreement is automatically renewed for a period of more than one month
at the end of a definite period for a subsequent period.
3. "Clear and conspicuous" means in a larger type than the surrounding text, in
contrasting type, font, or color to the surrounding text of the same size, or set off from
the surrounding text of the same size or symbols or other marks, in a manner that
clearly calls attention to the language and makes the language readily apparent,
readable, and understandable to the person to which the language is disclosed. In the
case of an audio disclosure, "clear and conspicuous" means in a volume and cadence
sufficient to be readily audible and understandable. A statement that contradicts or is
inconsistent with any other information with which the statement is presented is not
clear and conspicuous.
### § 51-37-02. Use of automatic renewal.

1. A person that sells or offers to sell merchandise or a service for a specified period
under an agreement containing a provision for automatic renewal shall:
a. Present the terms of the automatic renewal offer in a clear and conspicuous
manner before a subscription or purchasing agreement is fulfilled and in proximity
to the offer;
b. Provide an acknowledgment that includes the terms of the automatic renewal
offer and information regarding how to cancel in a manner which is capable of
being retained by the buyer; and
c. Provide a cost-effective, timely, and simple procedure for cancellation which must
be described in the acknowledgment required by subdivision b.
2. A person that sells or offers to sell merchandise or a service for a specified period
under an agreement that contains a provision for automatic renewal for a period of
more than six months at the end of the time period specified in the agreement shall
provide a clear and conspicuous written notice to the buyer stating the buyer may
cancel the contract and avoid automatic renewal.
a. The written notice must be provided by:
(1) First-class mail;
(2) Electronic mail; or
(3) Any easily accessible form of communication, including text message or a
mobile application, if the consumer specifically authorizes the person to
provide notice in such form.
b. The written notice must include the procedure for canceling and must be given at
least thirty days and not more than sixty days before the date upon which the
agreement will be renewed or the expiration of the period for cancellation.
3. If there is a material change in the terms of an agreement that contains a provision for
automatic renewal, the seller shall provide the buyer with clear and conspicuous notice
of the material change and provide information regarding how to cancel in a manner
which is capable of being retained by the buyer.
4. A person that sells or offers to sell merchandise or a service for a specified period
under an agreement that contains a provision for automatic renewal may not make or
submit any charge to a buyer's credit card, debit card, bank account, account with a
third party, or other financial account, unless the person has complied with the
requirements of subsection 1 and obtained the buyer's affirmative consent to the
agreement containing the terms of the automatic renewal.

5. The renewal period in a provision for automatic renewal of an agreement may not
exceed twelve months.
### § 51-37-03. Exceptions.

This chapter does not apply to:
1. The sale of insurance regulated under title 26.1;
2. The sale of public utilities regulated under title 49 or the federal communications
commission, or services provided by the public utilities; or
3. A bank, bank holding company, credit union, or other financial institution or trust
company regulated under title 6.
### § 51-37-04. Remedies.

An automatic renewal provision in violation of this chapter is unenforceable and void. If a
person sends merchandise or provides a service as a result of an automatic renewal of
agreement without complying with the requirements of section 51-37-02 or sends merchandise
or provides a service after a buyer undertook an affirmative act to cancel or otherwise avoid
charges, the merchandise or service is considered to be an unconditional gift to the buyer who
may dispose of the gift in any manner the buyer sees fit without any obligation to the person.
### § 51-37-05. Enforcement - Powers - Remedies - Penalty.

The attorney general may enforce this chapter. The attorney general, in enforcing this
chapter, has the powers provided in chapter 51-15 and may seek the remedies in chapter
51-15. Each act in violation of this chapter constitutes a separate violation of chapter 51-15. The
remedies, duties, prohibitions, and penalties of this chapter are not exclusive and are in addition
to all other causes of action, remedies, and penalties in chapter 51-15, or otherwise provided by
law.
### § 51-37-06. Private enforcement.

A person aggrieved by a violation of this chapter may bring an action to enjoin the violation
or for restitution, or both. The court may award the plaintiff costs, expenses, and reasonable
attorney's fees. This section does not limit any other claims the plaintiff may have against a
seller subject to this chapter.
