Grant Esterhuizen
The Office of Fair Trading (the “OFT”) is clamping down on unfair agreements and is preparing to make an announcement regarding long-term gym contracts in particular.
The announcement comes after the Guardian newspaper published an article about the fitness chain LA Fitness (of course, not to be confused with Lester Aldridge LLP!), which refused to terminate a contract with a reader who was heavily pregnant and whose husband had lost his job. Despite providing written evidence of their loss of income, LA Fitness demanded the couple pay the 15 months remaining on the contract, which would cost them £780.
A successful campaign through both the Guardian and the social network site Twitter resulted in LA Fitness eventually waiving the couple’s outstanding membership fees.
Whilst this unique situation was dependent upon the couple’s personal circumstances, it is worth taking the opportunity to consider the terms of any contracts you are a party to, particularly with regard to the contract length and its termination provisions. There are regulations in place to govern unfair contract terms and they set a minimum standard of fairness and transparency, which help consumers make well informed decisions.
The OFT warns that consumers should not be misled about the nature of the agreement they are entering into, nor the consequences for termination. When the OFT assesses fairness, it has to consider what a consumer is likely to understand by the clause wording and they are likely to conclude that a clause has potential for unfairness if it is likely to mislead, or be unintelligible to consumers.
Enforcement action can follow any breach of the regulations to stop the use of a particular term. This can have a significant impact and illustrates the importance of ensuring that the contract ‘small print’ is clear and unprejudiced if the provisions are to be successfully enforced.
If you would like to discuss this article or have any related questions please contact Grant Esterhuizen on 012 0278 6224 or email grant.esterhuizen@la-law.com.
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