SB127: SB127 Contracts with Small Businesses; automatic renewal provisions; definitions; provide and revise

Georgia law already requires sellers to disclose automatic renewal terms in service contracts with consumers. This bill rewrites Chapter 12 of Title 13 of Georgia's contract code (O.C.G.A. Title 13, Chapter 12) to extend those same protections to small businesses, defined as independently operated companies with fewer than 200 employees. Sellers offering service contracts with automatic renewal provisions must disclose them clearly in the contract. For contracts of 12 months or more that auto-renew for over a month, sellers must send written or electronic renewal notices 30 to 60 days before the cancellation deadline. Contracts that auto-renew for more than 24 months require the seller to get written acknowledgment and an affirmative response from the consumer or small business. Certain entities, like banks, electric utilities, and government bodies, are exempt, as are small business contracts under $200 a month. Violations make the renewal provision void. The law would take effect July 1, 2026, applying to contracts entered into on or after that date.

• Expands Georgia's automatic renewal disclosure law to cover small businesses (fewer than 200 employees) in addition to consumers.
• Requires sellers to clearly disclose automatic renewal provisions in service contracts or contract offers.
• Requires written or electronic renewal notices sent 30 to 60 days before the cancellation deadline for contracts of 12 months or more.
• Requires written acknowledgment and an affirmative opt-in response for contracts that auto-renew for more than 24 months.
• Exempts banks, foreign bank branches, electric utilities, certain regulated entities, local governments, and small business contracts under $200 per month.
• Makes any violation of the chapter render the automatic renewal provision void and unenforceable.

Small businesses with fewer than 200 employees that sign service contracts, consumers who already had similar protections, and sellers such as service providers who offer contracts with automatic renewal clauses. Banks, electric utilities, certain regulated industries, and local governments are exempt from the requirements.

Small businesses that sign service contracts, such as software, maintenance, or equipment leases, would gain the same advance-notice protections consumers already have, making it harder for a contract to silently renew for months or years without the business's knowledge or written consent.

• Section 1 rewrites O.C.G.A. Chapter 12 of Title 13, adding 'small business' as a protected category alongside 'consumer' in the definitions section (13-12-1).
• O.C.G.A. § 13-12-2 requires sellers to clearly and conspicuously disclose automatic renewal provisions in the contract or contract offer.
• O.C.G.A. § 13-12-3(a) requires 30-to-60-day advance written or electronic renewal notices for contracts of 12 months or longer.
• O.C.G.A. § 13-12-3(b) adds extra requirements, written acknowledgment and an affirmative response, for contracts renewing for more than 24 months.
• O.C.G.A. § 13-12-4 lists exemptions, including banks, electric utilities, local governments, and small business contracts costing $200 or less per month.
• O.C.G.A. § 13-12-5 states that violating the chapter voids the automatic renewal provision.
• Section 2 sets the effective date as July 1, 2026, applying only to contracts entered into on or after that date.

1. 2026-01-12Senate Recommitted (Senate)
2. 2025-02-19Senate Read Second Time (Senate)
3. 2025-02-18Senate Committee Favorably Reported By Substitute (Senate)
4. 2025-02-11Senate Read and Referred (Senate)
5. 2025-02-10Senate Hopper (Senate)

• Timothy Bearden (R, SD-030)Primary sponsor
• Matt Brass (R, SD-006)
• Jason Anavitarte (R, SD-031)
• Brian Strickland (R, SD-042)
• John Albers (R, SD-056)
• Marty Harbin (R, SD-016)
• Greg Dolezal (R, SD-027)
• Lee Anderson (R, SD-024)
• Randy Robertson (R, SD-029)

• small business protections
• consumer contracts
• automatic renewal
• contract law