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Tuesday
Mar172015

Hawaii Seeks New Rules for Automatic Renewal

IHRSA is monitoring legislation that would create new rules over the automatic renewal of certain service contracts.
 
House Bill 1219 (HB 1219), and its upper house companion, Senate Bill 464 (SB 464), would prohibit a business from automatically renewing a consumer's contract without first obtaining their "the acknowledgement and affirmative consent."
 
Hawaii's existing law seemingly prohibits health club contracts from containing an automatic renewal provision:
 

Hawaii Revised Statutes
§ 486N-8.  Duration of contracts.

(a) Every health club contract shall specify the duration of the contract. The unexpired, aggregate term of any health club contract or contracts and any extensions or renewals thereof shall at no time exceed thirty-six months per buyer. In no case shall a health club contract be measured by the life of the buyer or the life of the health club.

(b) A health club contract may not contain an automatic renewal clause.

 
It is noteworthy that legislators are looking into how renewal clauses are regulated, as they may also be interested in taking a look at the current requirements for health clubs. It also could mean that regulators may seek to ensure that health clubs are in compliance with the current law.
 
IHRSA would like to hear from our members about how the current requirements for health club contracts impact your business and your ability to retain members.
 
IHRSA supports contract provisions that allow for automatic continuation of service at the end of the original term on a month-to-month, at-will basis, as it offer consumers increased choice and flexibility.

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