Contract… and relax — gym contracts get into shape
Jayne Dalmer | August 31, 2017
New Zealand’s more than 700,000 gym goers can take a collective deep breath thanks to the Commerce Commission whipping gym owners into shape over their membership contracts.
The Commission peered into the sometimes murky mirror of gym contracts and what was reflected back wasn’t all body beautiful.
It’s unlawful for gym contracts to unfairly weigh down consumers. Image by Binyamin Mellish / CC 0
Bulky contracts put the squeeze on consumers
Some gyms had been slow to respond to a Fair Trading Act change in March 2015, which outlawed unfair consumer contracts. The new law says a contract is unfair if it’s significantly imbalanced in favour of the company and would hurt the consumer if it was enforced. A bit wobbly in other words.
In its pinch test of gym contracts, the commission diagnosed severe cancellation clauses, excessive liability overhang, a sweat-inducing ability to change services on offer, and flabby writing. Enough to make you need a lie down.
The Commission came across one weighty contract clause where you could only cancel your membership by standing at the counter in front of the manager and having them sign your request to leave. As if gyms weren’t intimidating enough…
Many gyms have now made their contracts simpler and fairer because of the Commission’s review.
Consumer New Zealand has also cartwheeled onto the treadmill with its Play Fair campaign. Consumer says, to comply with the Act, gyms must:
- let you end your membership easily when any minimum term ends — if you need to cancel the contract early, a cancellation fee should be fair
- let you end your membership if your circumstances change — for example, you become unwell or are suffering financial hardship
- notify you of changes to services and let you cancel if the changes disadvantage you
- refund lump sum membership fees paid in advance if you or the gym cancels the contract
- provide fair processes for dealing with complaints.
Gyms with contracts that don’t measure up can be prosecuted.
Gym goers need a balanced and easy to follow contract. Image by Holly / CC BY-ND 2.0
Contracts should be a balanced overview of rights and responsibilities
Terms and conditions in contracts set out the rights and responsibilities of gym goers and gym owners. In general, terms and conditions should have a simple overview of:
- what a gym membership entitles you to
- how much a membership costs
- what both parties agree to do
- what is included in the contract, and what isn’t
- any liabilities and other legal matters.
Trim the fat and magnify the fine print
When you look into the mirror, you need to see a true likeness. When consumers are offered a contract they need to see and understand what’s in front of them.
The law says consumer contracts must be ‘transparent’. This means they must be presented clearly, be up front, and written in plain language. No hidden bulges, sweaty depths, or saggy bottoms…
And if they’re written in plain language they’ll also build trust and respect from customers as well as muscle mass.
And you’ll be on the best side of the law.
No sweat.
More information on fair contracts
The Commerce Commission’s review into gym contracts is the Commission’s third review into unfair contracts. They’ve also reported on consumer contracts in the telecommunications and the energy retail sector.
Consumer New Zealand’s Play Fair campaign has more advice on fair contracts from a consumer’s perspective and letters consumers can use to complain about unfair contracts.