SB 127: Contracts with Small Businesses; automatic renewal provisions; definitions; provide and revise

Georgia currently requires sellers to clearly disclose automatic renewal provisions and give advance notice before contracts renew, but only for consumer contracts. This bill amends Chapter 12 of Title 13 of the Official Code of Georgia Annotated to extend those same protections to small businesses, defined as independently owned and operated businesses that are not dominant in their field and employ fewer than 200 people. Sellers would have to clearly disclose automatic renewal terms to small businesses and, for contracts of 12 months or longer, send written or electronic notice 30 to 60 days before the cancellation deadline. Contracts that auto-renew for more than 24 months would also need the small business's written acknowledgment and an affirmative statement that it does not intend to cancel. The bill exempts small business contracts worth $200 or less per month, along with existing exemptions for banks, utilities, and government entities. Violations make the automatic renewal provision void and unenforceable. The changes would take effect July 1, 2026, applying to contracts entered into on or after that date.

• Expands Georgia's automatic renewal disclosure and notice law (O.C.G.A. Chapter 12 of Title 13) to cover small businesses in addition to consumers.
• Adds a new definition of 'small business' as an independently owned business, not dominant in its field, with fewer than 200 employees.
• Requires sellers to give small businesses 30 to 60 days written or electronic notice before a contract of 12 months or more automatically renews.
• Requires written acknowledgment and an affirmative response from small businesses for contracts that auto-renew for more than 24 months.
• Exempts small business service contracts costing $200 or less per month (or the equivalent installment amount) from these requirements.
• Keeps the rule that violating the chapter voids and makes unenforceable the automatic renewal provision of the contract.

Small businesses that sign service contracts with automatic renewal clauses, and the sellers, vendors, or service providers who offer those contracts. Existing exemptions continue to apply to banks, foreign bank branches, electric utilities, entities regulated under Chapter 45 of Title 43, and local governments.

Small businesses that sign service contracts would gain the same advance-warning protections consumers already have, making it harder for a contract to auto-renew for years without notice. Sellers dealing with small business clients would face new disclosure and notice obligations or risk losing the ability to enforce renewal terms.

• Section 1 rewrites O.C.G.A. Chapter 12 of Title 13, adding 'small business' alongside 'consumer' throughout the automatic renewal disclosure and notice rules.
• 13-12-1 adds a new definition: a small business is independently owned and operated, not dominant in its field, and has fewer than 200 employees.
• 13-12-2 requires sellers to clearly and conspicuously disclose automatic renewal provisions in contracts with small businesses.
• 13-12-3 sets notice timing (30 to 60 days before the cancellation deadline) for contracts of 12 months or more, and requires written acknowledgment plus affirmative non-cancellation response for contracts renewing beyond 24 months.
• 13-12-4 adds a new exemption for small business contracts requiring monthly payments of $200 or less, on top of existing exemptions for banks, utilities, and local governments.
• 13-12-5 keeps the existing penalty: violating the chapter voids and makes unenforceable 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 (Senado)
2. 2025-02-19Senate Read Second Time (Senado)
3. 2025-02-18Senate Committee Favorably Reported By Substitute (Senado)
4. 2025-02-11Senate Read and Referred (Senado)
5. 2025-02-10Senate Hopper (Senado)

• Timothy Bearden (R, SD-030)Patrocinador principal
• 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
• contract law
• automatic renewal
• consumer protection
• service contracts