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§7.04 Specialty Service Contracts—Health Studio Contracts

Lesson 7:
& Warranties

Various statutory schemes govern the sale of specific goods and services in California. Here is a quick overview of the law governing health studio contracts. Similar requirements apply to other contracts regarding, e.g., dance lessons, dating services, weight loss programs, and rent-to-own agreements.

California laws regulating health studio services (e.g., health clubs) seek to eliminate fraud, deceit, imposition, and financial hardship in contracts for instruction or training in physical culture, body building, exercising, reducing, or figure development, or the use of a studio or gymnasium for these purposes. [CC §§1812.80–1812.81.] These laws do not apply to contracts for such services rendered by licensed health professionals, contracts for instruction at schools operating under the Education Code, or contracts relating to diet or eating habits not involving physical culture or skill. [CC §1812.81.] Any waiver by the buyer of the statutory provisions is void and unenforceable. [CC §1812.93.]

Health studio contracts must satisfy the following requirements [see CC §1812.90 (provisions not exclusive)]:

  • In writing: The contract must be in writing and the customer must receive a copy at the time he or she signs. [CC §1812.82.]
  • Term: The contract may not require payments or financing to exceed the term of the contract, which may not exceed three years. [CC §1812.84(a).] Month-to-month contracts are allowed. [CC §1812.98.] The contract must disclose the length of the contract term. [CC §1812.84(b).]
  • Performance: The contract must provide that performance will begin within six months of execution, and the contract must advise the buyer of cancellation and refund rights. The buyer may cancel the contract if the studio fails to provide the facilities advertised or offered in writing by the time indicated, or within six months of execution if no time was indicated. [CC §1812.85(a)–(b).] Special cancellation rights apply to a contract for a health facility that has not yet opened for business. [CC §1812.96(b).]
  • Initial fees: If the contract requires a payment of $1500 or more, including initiation or initial membership fees, the contract must provide that the buyer may cancel the contract within 20–45 days, depending on the amount of payment. [CC §1812.85(d).]
  • Maximum amount: On and after January 1, 2006, the contract amount may not exceed $3000, inclusive of initiation or initial membership fees and exclusive of interest or finance charges. [CC §1812.86(a)–(b); see CC §1812.86(c) ($4400 limit on Jan. 1, 2010).]
  • Death or disability: The contract must contain a clause for cancellation and refund on the consumer’s death or disability. [CC §1812.89.]
  • Relocation: The contract must contain a clause for cancellation if the consumer moves more than 25 miles from the facility and is unable to transfer the contract to a comparable facility. The health studio may retain a predetermined fee of no more than $100 ($50 if over half the contract has expired) plus the cost of services already received. [CC §1812.89(b).]
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