Introduction:
Certain areas of consumer purchases are subject to relatively strict state law to protect consumers from predatory business practices. Used car dealers, health supplement sellers, financial investment offerings, residential home improvement contracts, and real estate agent agreements all have complex and lengthy requirements in their contractual relationships with consumers.
One area where the law has imposed stringent requirements is "health studio services," a broad category of businesses that include the typical health gym but also include yoga studios, cross training, martial arts, etc.
Indeed, this area of the law initially stemmed from dance studios such as Arthur Murray Dance Studios, and much of the original language pertains to dance lessons. But times change, and most middle-class Americans now consider joining a gym or engaging in yoga, Pilates, martial arts, and the like as a desirable activity. Few take ballroom dancing lessons.
And while the law is slow to adjust, it does eventually alter its terms so that the typical consumer seeking services in a health club or a gym does have protection, and those offering those services are held to even stricter laws than pertained to dancing studios.
The Basic Law:
As defined in the law, a “contract for health studio services” means a contract for instruction, training or assistance in physical culture, body building, exercising, reducing, figure development, or any other such physical skill, or for the use by an individual patron of the facilities of a health studio, gymnasium or other facility used for any of the above purposes, or for membership in any group, club, association or organization formed for any of the above purposes . . . .”.
Since it includes "any such physical skill," broad categories such as martial arts studios, yoga, and Pilates are covered. Cross-training, cycling, and all specialized businesses seeking to train a physical skill are normally included. It is usually not applied to lessons in certain sports such as sailing, skiing, softball, etc.
DANCE STUDIOS:
There are separate provisions for dance stories.
The essential law for dance studios centers on the contracts that bind the customer and are found in the California statutes as follows:
1812.51. As used in this title, “contract for dance studio lessons and other services” means a contract for instruction in ballroom or other types of dancing, and includes lessons and other services, whether given to students individually or in groups...
1812.52. Every contract for dance studio lessons and other services shall be in writing and shall be subject to this title. A copy of the written contract shall be given to the customer at the time he or she signs the contract....
1812.53. (a) No contract for dance studio lessons and other services shall require payments or financing by the buyer over a period in excess of one year from the date the contract is entered into, nor shall the term of any contract be measured by the life of the buyer. However, the lessons and other services to be rendered to the buyer under the contract may extend over a period not to exceed seven years from the date the contract is entered into....
1812.54. (a) Every contract for dance studio lessons and other services shall provide that performance of the agreed-upon lessons will begin within six months from the date the contract is entered into.
(b) A contract for dance studio lessons and other services may be canceled by the student at any time, provided he or she gives written notice to the dance studio at the address specified in the contract. When a contract for dance studio lessons and other services is canceled, the dance studio shall calculate the refund on the contract, if any, on a pro rata basis. The dance studio shall refund any moneys owed to the student within 10 days of receiving the cancellation notice, unless the student owes the dance studio money for studio lessons or other services received prior to the cancellation, in which case any moneys owed the dance studio shall be deducted by the dance studio from the refund owed to the student and the balance, if any, shall be refunded as specified above. A dance studio shall not charge a cancellation fee, or other fee, for cancellation of the contract by the student.
(c) Every contract for dance studio lessons and other services shall contain a written statement of the hourly rate charged for each type of lesson for which the student has contracted. If the contract includes dance studio lessons that are sold at different per-hour rates, the contract shall contain separate hourly rates for each different type of lesson sold. All other services for which the student has contracted that are not capable of a per-hour charge shall be set forth in writing in specific terms. The statement shall be contained in the dance studio contract before the contract is signed by the buyer.
HEALTH CLUBS (GYMS):
Those entities falling under the definition as a “health studio services” provider seeking to contractually bind members to a term (as opposed to a month-to-month contract, terminable at any time), require a contract in writing and may not require payments, including initiation fees, of more than four thousand four hundred dollars over the term of the contract, exclusive of interest or finance charges. The contract may not be for longer than three (3) years and may not require payments beyond the stated contract term. The contract must clearly state the contract term in at least 14-point type just above the place for the member’s signature.
If the club is not yet open when the contract is executed, the contract must clearly state when the gym will be open and available for use, which date must be within six (6) months of the date of execution of the contract. If the club is not open and available for use within that time period, the member can cancel the contract and receive a refund of any money paid. Even if the club does open after that six-month period, the member will have ten (10) days from the date of opening to cancel.
Further, the contract shall also provide a conspicuous statement in a size equal to at least 10-point boldface type, as follows:
“You, the buyer, may choose to cancel this agreement at any time prior to midnight of the fifth business day of the health studio after the date of this agreement, excluding Sundays and holidays. To cancel this agreement, mail, email, or deliver a signed and dated notice that states that you, the buyer, are canceling this agreement, or words of similar effect. The notice shall be sent via first-class mail, via email from an email address on file with the health studio, or delivered in person to
____________________________________________________________________________________
(Name of health studio operator)
At _______________________________________________________________________________
(Address and email address of health studio operator).
The contract must provide a description of the services, facilities, and hours of access to which the consumer is entitled or state where that information is available on the health studio operator's Internet Web site. Any services, facilities, and hours of access that are not described in the contract or on the health studio operator's Internet Web site shall be considered optional services, and these optional services shall be considered as separate contracts.
Change in Services Offered:
The law goes on to state:
(c) If at any time during the term of the contract, including a transfer of the contractual obligation, the health studio eliminates or substantially reduces the scope of the facilities, such as swimming pools or tennis courts, that were described in the contract, in an advertisement relating to the specific location, or in a written offer, and available to the consumer upon execution of the contract, the consumer may cancel the contract and receive a pro rata refund. The consumer may not cancel the contract pursuant to this subdivision if the health studio, after giving reasonable notice to its members, temporarily takes facilities out of operation for reasonable repairs, modifications, substitutions, or improvements.
It is also critical to note that the right to cancel due to a change in services does not give the consumer the right to cancel a contract because of changes to the type or quantity of classes or equipment offered, provided the consumer is informed in the contract that the health studio reserves the right to make changes to the type or quantity of classes or equipment offered and the changes to the type or quantity of classes or equipment offered are reasonable under the circumstances.
Right to Cancel After Signing:
If a contract for health studio services requires payment of one thousand five hundred dollars ($1,500) to two thousand dollars ($2,000), inclusive, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 20 days after the contract is executed.
If a contract for health studio services requires payment of two thousand one dollars ($2,001) to two thousand five hundred dollars ($2,500), inclusive, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 30 days after the contract is executed.
If a contract for health studio services requires payment of two thousand five hundred one dollars ($2,501) or more, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 45 days after the contract is executed.
And note that upon cancellation, the consumer shall be liable only for that portion of the total contract payment, including initiation fees and other charges, however denominated, that has been available for use by the consumer, based upon a pro rata calculation over the term of the contract. The remaining portion of the contract payment shall be returned to the consumer by the health studio.
Common Sense:
One gym owner told the writer that the greatest profit accrues to the facility after February has passed, and the number of members who actually use the gym drastically declines. Each person using the facility costs money. Not only in finite supplies such as water and soap, but also in the depreciation of the expensive machinery and equipment in the gym. Since few pay for each visit, each person who is a member and is not in the gym that day is economically beneficial to the gym. As New Year's resolutions fade, so does attendance. And profits rise.
The various stringent laws cited above recognize this fact and the truth that many who join gyms regret their decision as the weeks go by.
In reality, regular attendance at a health club is beneficial for one’s health and mental well-being. They serve a useful function. That said, if you are one of the many who have signed up for a gym in California, you have a significant ability to withdraw from the contract.
Your first step is to read carefully the contract you executed when you joined the health club. Given the law’s insistence on notice to the consumer, your right to cancel will be clearly stated in the contract, and the sooner you act, the better.
And note further that if the health club significantly alters its facilities so that prior uses are no longer possible, you again have the right to cancel.
For those facilities which offer lessons, such as yoga and Pilates, it is typical to pay by the lesson, but packages of lessons are often offered, in which case the right to cancel can also accrue much in the same way as a health club.
Read the contract.