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AB 483

Fixed term installment contracts: early termination fees.

2025-2026 Regular Session Introduced by Jacqui Irwin

California restricts early termination fees in fixed-term installment contracts, allowing consumers to exit agreements with limited financial penalties.

Chaptered by Secretary of State - Chapter 557, Statutes of 2025.
#fixedterminstallmentcontracts #earlyterminationfees
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Bill Summary · AB 483

Legislative bill overview

AB 483 regulates early termination fees in fixed-term installment contracts in California, likely capping or restricting the fees consumers must pay when ending contracts before the agreed term expires. The bill passed unanimously through both chambers and was signed into law, becoming Chapter 557 of the 2025 Statutes.

Why is this important

Early termination fees can be substantial barriers for consumers trying to exit contracts (phone plans, gym memberships, equipment leases, etc.), sometimes making it economically impossible to leave even when circumstances change. This law addresses a consumer protection issue by limiting what businesses can charge, potentially making contract terms more flexible for Californians.

Potential points of contention

  • Business cost concerns: Companies argue that early termination fees compensate for upfront costs and lost revenue; restrictions may increase prices for all consumers or reduce service availability
  • Contract complexity: Different industries have different cost structures; a one-size-fits-all fee cap may work better for some sectors than others
  • Enforcement challenges: Without clear definitions, determining which contracts qualify and what constitutes a valid fee may create litigation and compliance uncertainty

Compiled from official sources — confirm details with the bill’s official record.

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