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Gym contracts

Is your gym treating you unfairly? Our review found gym contracts can be peppered with terms that risk breaching the Fair Trading Act.

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Since March 2015, the Act has banned unfair terms in consumer contracts. But our review found some gyms are at risk of breaching the ban. The Commerce Commission is also looking at gym contracts in light of the law change.

“30 days’ notice” clauses

Sign-up for a 12-month gym membership and you reasonably expect it to end after 12 months. However, contracts can give gyms the right to keep charging fees until you give 30 days’ written notice to cancel. We think these notice periods are unfair. You should be able to end payments easily when the membership term ends.

The contract shall continue indefinitely after the minimum term until a request to terminate is made. There is a notice period of 30 days during which time any payments that fall due must be paidDebitsuccess contract for Configure Express

“It’s not over ’til we say” clauses

Some gym contracts have a clause stating your request to cancel won’t take effect until the gym confirms it in writing. Any delay by the gym means you’ll be stuck paying membership fees. Other contracts require members to use a prescribed form to cancel. These clauses aren’t necessary and risk unfairly penalising gym members.

Membership may be cancelled by completing the club’s cancellation form. This form must be filled out over the counter at the gym and countersigned by the manager before taking effectSnap Fitness

“Services may change” clauses

Gym contracts can restrict members’ rights to cancel, even if the gym changes its services or location. The contract says you have to keep paying fees regardless. Few contracts allow members to cancel if their circumstances change – for example, you suffer an injury or become unwell.

The gym reserves the right to change, alter or adapt timetables, facilities or location at any time. Suspension of your membership is at the gym’s sole discretionHabit Health & Fitness

“Don’t blame us” clauses

Many gym contracts attempt to limit or exclude the gym’s liability for problems. These types of terms can be broadly drafted, excluding responsibility for almost everything. They’re not only likely to be unfair but they also risk misleading consumers about their rights to reasonable standards of service.

The member releases the company and its employees, contractors and agents from all liability and responsibility whatsoever, for personal injury, property damage or death however caused including, but not limited to, the negligence of the company or its staff or any other person using the premisesExodus Health & Fitness Club

“You’re out” clauses

Gym members may have limited rights to cancel but most gyms reserve their rights to terminate contracts in a variety of situations, including for minor slip-ups such as paying fees a day late. However, it’s hard to find a contract that penalises the gym for making any slip-up.

We can terminate your membership immediately by giving you notice in writing, if you breach any important term of this contract, including failing to pay any fee on the due dateLes Mills

Shaping up?

Debitsuccess, which manages memberships for Configure Express, Club Physical and other gyms, says it’s in discussions with the Commerce Commission about its standard terms and conditions. Debitsuccess head of group compliance Brian Garrity says it intends to address the issues we’ve raised.

Exodus Health & Fitness Club and Habit Health & Fitness said they would review their contracts if there were concerns about any terms.

However, Les Mills doesn’t believe terms in its contract are unfair. While the contract gives the gym the right to end a membership if “any fee” isn’t paid on time, the company's head of finance Peter Murray says it wouldn’t do this for “odd late payments”. We think the contract should be amended to reflect the gym’s practice and be fairer to members.

Snap Fitness didn’t respond to our inquiries.

Fight unfair terms

If you’ve been asked to sign a contract you think is unfair, you don’t have to put up with it. Tell the gym you think it’s not playing fair and make a complaint to the Commerce Commission. Here are some sample letters to help you.

The Fair Trading Act defines a term as unfair if it:

  • would cause a significant imbalance between the rights of the company and the consumer,
  • is not reasonably necessary to protect the legitimate interests of the company, and
  • would cause detriment, whether financial or otherwise, to the consumer if it were to be applied or relied on.

What to look for

If you’re joining a gym, fair contracts should:

  • Let you end your membership easily when any minimum term ends. If you need to cancel the contract early, any cancellation fee should be fair.
  • Let you end your membership if your circumstances change, for example, you become unwell or are suffering financial hardship.
  • Require the gym to notify you of changes to services and let you cancel if the changes disadvantage you.
  • Provide for membership fees paid in advance by lump sum to be refunded in the event you or the gym cancels the contract.
  • Provide fair processes for dealing with complaints.
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Fair’s fair

Unfair terms in gym contracts have been under the gun in other countries with similar legislation to us. Court decisions and guidance by regulators have signalled the following terms are likely to be unfair:

  • Membership terms of 12, 24 and 36 months that don’t allow members to cancel if their circumstances change, such as suffering an injury or losing their job.
  • Terms that let the gym make significant changes to its services but don’t let the member cancel.
  • Terms that unfairly restrict the ways members can give notice to cancel – for example, requiring notice to be in a specific form.
  • Terms that describe a membership as lasting for a fixed period when the contract continues indefinitely.
  • Terms that permit the gym to end the contract for relatively minor breaches and demand the member pays for their entire membership term.
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