Can I terminate a fixed term contract with a gym that has been sold?

Question Details: The gym I was with had some financial trouble and was closed down. It was then sold off to another gym. I was under a fixed term contract with the first gym. I no longer go to the gym and want to cancel my membership, but was wondering if the fixed term contract is still binding?

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Answers by Lawyers

Community Law Wellington & Hutt Valley

Usually your fixed term contract will stand, even if your gym has been sold.

However, if your gym has moved location as part of the sale, changed its opening hours, or no longer offers the specific services that encouraged you to join the gym, you may be able to end your membership without penalty.

Have a chat with the gym staff about cancelling the membership. Given that they've changed owners, it's possible that some other 'features' have changed: class times, the range of classes offered, the particular instructors or trainers employed. If you can convince the gym staff that the 'new gym' isn't the same service you signed up for, you might be able to have your membership cancelled without penalty.

For you to get out of the contract, the changes to the gym's offerings need to be significant, because legally you’ll be arguing that the gym is no longer meeting its contractual obligations to you. That gives you the right to cancel the contract under the Consumer Guarantees Act 1993. Click here to learn more: www.communitylaw.org.nz It's got to be more than a change in your lifestyle that means you no longer choose to use the gym.

It’s also worth checking your contract: check for a clause dealing with assigning or transferring your membership. If you don't have a copy of your contract anymore, you should be able to get a new copy from the gym. Make sure it's the one you signed. If your contract is hard to understand, you can contact your local Community Law Centre (www.communitylaw.org.nz) for help interpreting it.

While you're looking at your contract, it might be worth checking out how much it would cost you to terminate your membership early. While there is likely to be some penalty, it may be cheaper in the long run than paying for a membership you're not using - and lots of us have been there!

For general information on the basics about contracts, click here: www.consumeraffairs.govt.nz.

Answered 2 Dec 2012. The IMPORTANT NOTICE below is part of this answer.

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