Countries › Paraguay › Guide › 16. What is normal abroad but not here › Consumer contracts: no automatic renewal, no forced arbitration

Consumer contracts: no automatic renewal, no forced arbitration

Last verified: 2026-10-28 · Status: Stable

Abroad, standard terms often renew automatically, impose arbitration and let the supplier change prices. In Paraguay, those clauses are void in consumer contracts, and companies buying as final recipients are consumers too. Off premises sales carry a 7 day withdrawal right, and credit sales must disclose cash price and rates or be void.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (planilla de cotizaciones). Conversions are for orientation only.

Key facts

Withdrawal period for contracts made off premises	7 daysLey 1334/1998 art. 26, as of 1998-10-27 · in force
Automatic renewal of fixed term consumer contracts allowed	no textLey 1334/1998 art. 28 l (Ley 5427/2015), as of 2015-04-30 · in force
Mandatory arbitration clauses in consumer contracts allowed	no textLey 1334/1998 art. 28 d (Ley 5427/2015), as of 2015-04-30 · in force
BCP reference rate, PYG per US dollar, 28 October 2026	5868.31 PYGBCP planilla de cotizaciones, as of 2026-10-28 · in force

The rule

1. Companies can be consumers. A consumer or user is any natural or legal person, national or foreign, that acquires, uses or enjoys goods or services as final recipient; services include banking, financial, credit and insurance services.
Cost to do it: No fee; consumer rules apply to B2B sales to final users.
Example: A software vendor selling licences to a Paraguayan company for its own use can face consumer law claims. / Not applicable.Ley Nº 1334/1998, consumer protection (promulgated 27 October 1998, published 30 October 1998), art. 4 a and d, 1998-10-27 official text · verified 2026-10-28

2. Void clauses. Clauses are abusive and void by law when they, among others, restrict liability or consumer rights, reverse the burden of proof, impose mandatory arbitration, let the supplier vary the price or terms or rescind unilaterally, let the supplier cut a service without notice, automatically renew a fixed term contract unless the consumer objects, or treat the consumer's silence as acceptance.
Cost to do it: No fee; the clause is simply unenforceable.
Example: An annual subscription that rolls over unless the customer cancels cannot be enforced as renewed. / Not applicable.Ley Nº 1334/1998, art. 28 as reworded by Ley Nº 5427/2015 (promulgated 30 April 2015, published 5 May 2015), Ley 1334/1998 art. 28 (text given by Ley 5427/2015 art. 1), in particular lit. d, e, i, k, l and m, 2015-04-30 official text · verified 2026-10-28 · changed: Ley Nº 5427/2015 of 30 April 2015 added lit. i to m to art. 28, including the automatic renewal and silence as acceptance bans.

3. Withdrawal off premises. When a contract is made outside the business premises, especially by telephone or at the consumer's home, the consumer may withdraw within seven days of signing or of receiving the product or service and recover the amounts paid, updated, if the product or service was not used or damaged.
Cost to do it: Refund of the price, updated.
Example: A door to door sale of PYG 3,000,000 withdrawn on day 6 is refunded in full. / About US$511.Ley Nº 1334/1998, art. 26, 1998-10-27 official text · verified 2026-10-28

4. Credit sales must disclose. In credit operations to buy goods or services the contract must state, on pain of nullity, the cash price, the interest amount and annual or monthly rates and the default rate, any surcharges, the number and frequency of payments, the total to pay (which may not exceed the cash price plus interest) and the parties' rights on default. Clauses are read in the way most favourable to the consumer.
Cost to do it: No fee; missing items make the credit term void.
Example: An instalment plan that shows only the monthly payment, without the cash price and rate, is exposed to nullity. / Not applicable.Ley Nº 1334/1998, art. 27 and 29, 1998-10-27 official text · verified 2026-10-28

Clause	Status	Norm
Automatic renewal unless cancelled	Void	art. 28 l
Silence equals acceptance	Void	art. 28 m
Mandatory arbitration	Void	art. 28 d
Unilateral price change	Void	art. 28 e
Unilateral change or termination	Void	art. 28 i
Cutting service without notice	Void	art. 28 k
Prepayment penalty	Barred	art. 30 (Ley 6624/2020)

Clauses common abroad that are void in Paraguayan consumer contracts

Worked example

A foreign streaming and software provider adapts its global terms for Paraguay: renewal requires an express opt in, disputes go to the courts or voluntary arbitration after the dispute arises, price changes need the customer's acceptance, and phone sales carry a seven day withdrawal notice.

Step by step

Review standard terms against art. 28 before launch.
Replace auto renewal with an express renewal step.
Add the seven day withdrawal notice to phone, home and off premises sales.
Show cash price, rates, number of payments and total in every credit sale.

Common traps

Assuming B2B means no consumer law: legal persons buying as final recipients are consumers (art. 4 a).
Keeping an arbitration clause in consumer terms: mandatory arbitration is void (art. 28 d).
Relying on silence to accept new terms: void (art. 28 m).

Sources

← A general data protection law, but only from late 2027Stamped accounting books, a registered accountant and a legal reserve →

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