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S.B. 86 Enrolled
Patrice M. Arent This act modifies the title dealing with Contracts and Obligations in General by enacting
provisions that prohibit the automatic renewal of service contracts unless the seller
notifies the consumer of the automatic renewal. The act provides exemptions.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
15-10-101, Utah Code Annotated 1953
15-10-102, Utah Code Annotated 1953
15-10-201, Utah Code Annotated 1953
15-10-202, Utah Code Annotated 1953
15-10-301, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 15-10-101 is enacted to read:
15-10-101. Title.
This chapter is known as the "Service Contracts Act."
Section 2. Section 15-10-102 is enacted to read:
15-10-102. Definitions.
As used in this chapter:
(1) "Automatic renewal provision" means a provision under which a service contract is
renewed for a specified period if:
(a) the renewal causes the service contract to be in effect more than six months after
the day of the initiation of the service contract; and
(b) the renewal is effective unless the consumer gives notice to the seller of the
consumer's intention to terminate the service contract.
(2) "Consumer" means a person receiving service, maintenance, or repair under a service
contract.
(3) "Seller" means a person providing service, maintenance, or repair under a service
contract.
(4) (a) "Service contract" means any contract for service, maintenance, or repair:
(i) in connection with any real property; or
(ii) that provides a benefit to any real property.
(b) "Service contract" does not include a contract affecting any right, title, estate, or
interest in real property, including:
(i) a fee title interest;
(ii) a leasehold interest;
(iii) an option contract relating to real property;
(iv) a real estate purchase contract;
(v) an easement; or
(vi) any other real property interest governed by Title 57, Real Estate.
Section 3. Section 15-10-201 is enacted to read:
15-10-201. Notice requirement.
(1) A service contract may not contain an automatic renewal provision unless the seller
provides the consumer written notice complying with Subsection (2) that informs the consumer
of the automatic renewal provision.
(2) The seller shall provide the written notice required under Subsection (1) to the
consumer personally, by certified mail, or prominently displayed on the first page of a monthly
statement:
(a) at least 30 calendar days prior to the last day on which the consumer may give notice
of the consumer's intention to terminate the contract;
(b) not more than 90 calendar days prior to the last day on which the consumer may give
notice of the consumer's intention to terminate the contract; and
(c) written in clear and understandable language printed in an easy-to-read type size and
style.
Section 4. Section 15-10-202 is enacted to read:
15-10-202. Remedy for violation.
If a seller does not comply with Section 15-10-201 with respect to a service contract
containing an automatic renewal provision:
(1) the automatic renewal provision is void and unconscionable as a matter of public
policy; and
(2) the service contract shall automatically renew on a month-to-month basis.
Section 5. Section 15-10-301 is enacted to read:
15-10-301. Exemptions.
This chapter does not apply to a contract made pursuant to Title 11, Chapter 13, Interlocal
Cooperation Act.
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