California Assembly Bill 1221 has been signed by the Governor and will be effective January 1, 2022. This legislation addresses ambiguities within California’s Song-Beverly Act which governs consumer product warranties in this state. This legislation provides two important clarifications to existing law: 1) to permit coverage to a group or “class” of products in a single service contract, and 2) to permit automatic renewals of service contracts.
Current law, which refers to a service contract covering “a consumer product”, has been interpreted by regulators to allow only one product to be covered under a single contract. Current law also requires that the term (duration) of a service contract be measured by “elapsed time or an objective measure of use”. Historically, this language has been interpreted by regulators to prohibit automatic renewals, i.e., as is common with monthly term service contracts.
Any providers of service contracts that wish to incorporate the options now made available under this new law must be file updated contracts with the Bureau of Household Goods and Services of the California Department of Consumer Affairs.
