Stuck in a Gym Contract? Here’s What Your Gym Doesn’t Want You to Know About Your Consumer Rights

With the cost of living increasing every day and people’s lifestyles changing, many people are moving homes, relocating to different areas, or finding that their financial circumstances have changed and they can no longer afford their gym membership.

However, when you attempt to cancel your membership, you are often met with punitive cancellation charges and demands to pay the remaining months of your contract. It becomes an unexpected cost that you were not aware of, leaving many South Africans feeling forced to continue making monthly payments simply to avoid the penalty.

The good news is that South African consumer law says otherwise. This article discusses your rights as a consumer when dealing with gym contracts, unreasonable cancellation penalties, and more importantly, what gym companies can and cannot legally do.

A Common Scenario

Sarah signs a 36-month gym contract in January because she is motivated and inspired. Three months later, work becomes demanding, life gets expensive, she relocates and decides to cancel her membership. The gym responds by saying she must pay 50% of the remaining contract value, she cannot cancel until the full term expires and if she stops payment, she will have a negative credit listing against her name. Naturally, Sarah panics. What are Sarah’s rights?

Contract Law 101

Gyms are notorious for their overly complicated contracts, hidden fees, and cancellation clauses that are usually drafted to favour the gym and not the consumer. For any contract to be valid and enforceable, certain legal requirements must be met:

1. Consensus – Both parties must agree to the rights and obligations arising from the contract.
2. Capacity – The parties must have the necessary legal and mental capacity to contract. In simple terms, they must be mentally competent and over the age of 18.
3. Formalities – Any required formalities must be complied with. Most gym contracts require the agreement to be in writing and signed by both parties.
4. Legality – The contract must operate within the confines of the law. A contract cannot override legislation or public policy.
5. Possibility of Performance – The obligations in the contract must actually be capable of being performed.
6. Certainty – The material terms of the contract must be clear and unambiguous so that both parties understand exactly what their rights and obligations are.

If a contract does not meet these requirements, it may be void or voidable.

The Protection of the Consumer Protection Act (“CPA”)

The purpose of the CPA is to protect consumers from unfair business practices and contractual terms that are against public policy. This includes gym contracts.

In terms of section 14 of the CPA, consumers are entitled to cancel fixed-term agreements by giving 20 business days’ notice in writing or in another recorded manner. The CPA specifically provides that:

• You may cancel fixed-term agreements before they expire.
• You are not forced to remain in a contract.
• Suppliers may only charge a reasonable cancellation penalty.
• Businesses cannot impose penalties that destroy your right to cancel.

This means your gym cannot simply make up a cancellation fee.

What is a “Reasonable” Cancellation Penalty?

A gym cannot demand payment for all future profits it would have earned had you remained locked into the contract. In a matter before the Consumer Goods and Services Ombud (“CGSO”), a gym attempted to charge a consumer 50% of the remaining value of a 36-month contract after cancellation.

The Ombud found that:

• The cancellation fee was excessive;
• The gym could not claim future losses; and
• The penalty could not negate the consumer’s right to cancel.

The Ombud further confirmed that suppliers must consider the actual losses suffered and not simply impose arbitrary percentages.

“But the Contract Says So”

This is probably every gym’s favourite sentence. However, section 51 of the CPA prevents suppliers from relying on contractual terms that conflict with consumer protection legislation.

Your gym contract cannot override the law. A cancellation clause that is unfair, excessive, punitive, or contrary to public policy may not be enforceable merely because it appears in fine print on page 14 of the agreement nobody read.

Can a Gym Force You Into a 36-Month Contract?

The CPA regulations provide that fixed-term consumer agreements generally may not exceed 24 months unless:

• The longer term is expressly agreed upon; and
• The supplier can show there is a financial benefit to the consumer.

What Should You Do If You Want to Cancel?

1. Give 20 days’ written notice.
2. Keep records of all communication.
3. Request a breakdown of the cancellation fee.
4. Do not allow intimidation tactics to scare you into paying unlawful penalties.

A gym is entitled to recover reasonable losses, not to profit from trapping consumers in contracts they no longer want or are unable to continue with. The law aims to create fairness and balance between businesses and consumers.

If you are being charged excessive cancellation penalties, threatened for trying to leave a contract, or simply unsure whether your gym’s conduct is lawful, it is important to obtain proper legal advice and understand your rights under the CPA.

Here at Van Deventer’s, we specialise in Consumer complaints and have assisted many clients with referring matters to the ombud and successfully litigated against unfair contract terms. Contact our offices today to protect your rights.