Potential Statutory Obstacles In Enforcing Waiver Provisions In Health And Fitness Club Agreements In California
In a recent article, we addressed the enforceability of waiver and release provisions in health and fitness club agreements in California. This article updates that article and explores the potential impact of California Civil Code §1812, et. seq. on California case law that historically has upheld such provisions. Section 1812 provides that certain format, language, and notice requirements must be included in the content of written membership agreements for health and fitness clubs and provides that the failure to adhere to such requirements result in the entire agreement - including, perhaps, the applicable waiver and release provision - being found void and unenforceable.
California's revised “Health Studio Services Contract Law” which applies to all contracts for health studio services, which are defined to include instruction, training or assistance in “exercising,” “body building,” “reducing,” or “other similar skills” and to the use of a health studio, gym or other facility for any of these purposes and the membership in such facilities. The statute on its face seems to merely codify what has been the prevailing practice for health and fitness clubs for years. For example, all studio contracts must be in writing, a copy provided to the consumer and a five-day right-to-cancel provision must be included. The right-to-cancel provision must also contain very specific notice language for the consumer.
The statute also sets limits on the length of membership agreements to three years. It sets forth that every contract must specifically state what facilities and services are provided and, if such facilities and services are not provided, or substantially changed without prior notice, the consumer has the right to cancel the contract at any time. Other grounds for cancellation are also required, such as a disability or if the consumer moves 25 miles or farther from the health studio and is unable to transfer the contract to a comparable facility.
One particular aspect of the statute that may specifically affect indemnity provisions is what amounts to a ‘fraud exception.’ Cal. Civ. Code §§ 1812.91 & 1812.92. If the health club misrepresents any aspect of the contract or induces signing the contract by willfully false or misleading information or advertising, the contract is rendered “void and unenforceable.” Cal. Civ. Code § 1812.91.
Although the actual impact on the enforceability of waiver and release provisions in membership agreements for health and fitness clubs remains to be seen, this ‘fraud exception’ may form the basis to nullify the enforceability of such provisions. Arguably, the fraud exception seems to simply apply a maxim of contract law that renders all contracts procured by fraud to be void and unenforceable as a matter of public policy, so there may be no real change in the actual jurisprudence.
However, there may be a legitimate concern among health and fitness club owners and operators (as well as their attorneys) that the language of the statute, specifically Section 1812.91 which generally renders all noncomplying contracts to be void and unenforceable, could result in the unenforceability of a specific waiver and release provision in the contract based on seemingly innocent conduct, such as failing to provide the proper font size or miscalculating the terms of the life of the contract. To our knowledge, since the enactment of Section 1812 in the 1960s, no California appellate court has addressed the statute's provisions in the context of enforcing a specific release provision in a membership agreement, although the potential is certainly there.
Mr. Minioza is a shareholder in the California law firm of Ericksen Arbuthnot. He has defended health and fitness clubs for the better part of his 15 years in litigation, including Bally's Total Fitness, the YMCA, Club One, In-Shape Fitness, and World Gym.