Text of MA Contract and explaination of statutes

[Samuel Browning]

The other day while cleaning out my files I ran into a contract from 1992 between myself and a MA school. I thought it would be interesting to post parts of the contract language and show how it follows by rote the Connecticut Statutes regulating health club contracts. If you ever have a problem with your martial arts school, and squabble over the contract, chances are it was written to conform to consumer laws in your state. If it doesn't conform, the contract very likely is null and void due to its violations of public policy.

If anyone else would like to post the language of their contracts it might be helpful for some noobs who are visiting new schools.

The document before me is labled "Health Club Contract" In Connecticut Martial Arts schools are regulated as health clubs because of the broad nature of Connecticut General Statutes Sec. 21a-216. As always my usually annoying comments in the midst of quotes can be found in [brackets].

"Definitions. As used in this chapter:

(1) "Health club" means any corporation, partnership, unincorporated association or other business enterprise offering facilities for the preservation, maintenance, encouragement or development of physical fitness or well-being in return for the payment of a fee entitling the buyer to the use of such facilities. Such term shall include, but not be limited to, "health spas", "sports and health clubs", "tennis clubs", "racquet ball courts", "golf clubs", "platform tennis clubs", "gymnasiums", "figure salons", "health studios", "weight control studios", and any organization primarily operated for the purpose of teaching a particular form of self-defense or martial art, such as judo, karate or kung fu, [self defense or martial art pretty much covers the waterfront.] but shall not include any establishment from which a buyer may only purchase or become obligated to purchase services to be rendered for a period of not more than thirty days and which does not collect more than thirty days payment in advance of the rendering of such services, [So if the club only charges 30 days in advance, it can avoid coming under this statute] nonprofit organizations, any massage establishment, [Ronin69, in Ct, your business interests would be protected!] any private club owned and operated by its members [probable exception for college martial arts clubs] or any facility operated by the state or any of its political subdivisions.

(2) "Business day" means any day except a Sunday or a legal holiday.

(3) "Health club contract" means an agreement by which a buyer is entitled to membership in a health club or use of the facilities of a health club. All health club contracts shall be in writing. [Important, oral contracts are not permitted!]

(4) "Buyer" means a person who enters into, or receives the benefit of, a health club contract.

(5) "Services actually received" includes any period during which the facilities of the health club are available to the buyer pursuant to the health club contract whether or not the buyer makes use of the facilities, except when the consideration paid for the health club contract is determined by the number of times the buyer makes use of the health club facilities. The facilities shall not be deemed to be available to the buyer if the buyer fails to make use of the health club facilities in reliance upon a statement or representation of an officer, employee or agent of the health club which would reasonably lead the buyer to conclude that his contract had been cancelled or that the facilities were not actually available for use by the buyer. [There was probably some bad behavior giving rise to this clause.]

(6) "Disabled" and "disability" mean a condition which has existed or will exist for more than forty-five days which prevents a buyer from utilizing the health club to the same extent he utilized it before commencement of such condition.
[This section is relevant concerning the grounds for a buyer's right to cancel.]

(7) "Payment in advance" includes, but is not limited to, the payment of all service fees, initiation fees, application fees, maintenance fees or similar fees.

[Samuel Browning]

From the Contact:

"Buyer's Right to Cancel

If you wish to cancel this contract, you may cancel by mailing a written notice by certified or registered mail to the health club. The notice must say that you do not want to be bound by this contract and must be delivered or mailed before midnight of the third business day after you sign this contract. After you cancel, the health club may request the return of all contracts , membership cards and other documents of evidence of membership . This notice must be mailed to: [The Omega School of Grappling and involuntary Noob sodomy, 6969 De Sade Lane, MAS, Connecticut].

You may also cancel this contract if you relocate your residence further then twenty five miles from any health club operated by the seller or from any other substantially similar health club which would accept the obligation of the seller. This contract may also be cancelled if you die, or if the health club ceases operation at the location where you entered into this contract. If you become disabled, [definition was convenantly not provided here] you shall have the option of (1) being relieved of liability for payment on that portion of the contract term for which you are disabled or (2) extending the duration of the original contract at no cost for you for a period equal to the duration of the disability. You must prove such disability by a doctor's certificate, which certificate shall be enclosed with the written notice of disability sent to the health club. The health club may require that you be examined by another physician agreeable to you and the health club at its expense. If you cancel, the health club may keep or collect an amount equal to the fair market value of the services or use of facilities you have already received.

To the best of your knowledge you do not have any physical limitations that would prevent you from participating in the health club's program. (See reverse side for complete list of memberships available and prices.)" [Notice how the school tries to prevent someone from getting out of the contract by using a pre-existing condition if a student teacher relationship goes South.]

The relevant statute reads as follows:

Cnnecticut General Statutes Sec. 21a-217. "Contracts for health club services. Right of cancellation. Every contract for health club services shall provide that such contract may be cancelled within three business days after the date of receipt by the buyer of a copy of the contract, by written notice delivered by certified or registered United States mail to the seller at an address which shall be specified in the contract. After receipt of such cancellation, the health club may request the return of contract forms, membership cards and any and all other documents and evidence of membership previously delivered to the buyer. Cancellation shall be without liability on the part of the buyer, except for the fair market value of services actually received and the buyer shall be entitled to a refund of the entire consideration paid for the contract, if any, less the fair market value of the services or use of facilities already actually received. Such right of cancellation shall not be affected by the terms of the contract and may not be waived or otherwise surrendered. [This requirement was probably put into place so that the buyer could cancel the contract if they had been 'pressured' into signing the agreement, notice that the law specifically states that there is no way that this cancellation provision can be validly waived, even if such such a waiver is made in writing by the buyer.]


Such contract for health club services shall also contain a clause providing that if the person receiving the benefits of such contract relocates further than twenty-five miles from a health club facility operated by the seller [In Ct you couldn't use this clause to escape the Villari or the USSD chain they're everywhere!] or a substantially similar health club facility which would accept the seller's obligation under the contract, [Theoretically Kim's TKD could sell your contract to TKD Hut in your new town and you would still be obligated] or dies during the membership term following the date of such contract, [I would certainly hope so!] or if the health club ceases operation at the location where the buyer entered into the contract, the buyer or his estate shall be relieved of any further obligation for payment under the contract not then due and owing. The contract shall also provide that if the buyer becomes disabled during the membership term, the buyer shall have the option of (1) being relieved of liability for payment on that portion of the contract term for which he is disabled or (2) extending the duration of the original contract at no cost to the buyer for a period equal to the duration of the disability. The health club shall have the right to require and verify reasonable evidence of relocation, disability or death. In the case of disability, the health club may require that a doctor's certificate be submitted as verification and may also require in such contract that the buyer submit to a physical examination by a doctor agreeable to the buyer and the health club, the cost of which examination shall be borne by the health club. [This language was pretty much cut and pasted into our sample contract.]

[Samuel Browning]

Notice that the Connecticut Legislature distrusts health club owners so much they actually require then to print information about cancellation rights word for word on the contract itself and with certain headings and a minimum font size.

Sec. 21a-218. "Statement of buyer's rights. Form. Buyer's cancellation. Seller's written confirmation. Buyer's disability. Refunds. (a) A copy of the health club contract shall be delivered to the buyer at the time the contract is signed. All health club contracts shall be in writing signed by the buyer, shall designate the date on which the buyer actually signs the contract and shall contain a statement of the buyer's rights which complies with this section.

The statement must: (1) Appear in the contract under the conspicuous caption: "BUYER'S RIGHT TO CANCEL", and (2) read as follows:
"If you wish to cancel this contract, you may cancel by mailing a written notice by certified or registered mail to the health club. The notice must say that you do not wish to be bound by this contract and must be delivered or mailed before midnight of the third business day after you sign this contract. After you cancel, the health club may request the return of all contracts, membership cards and other documents of evidence of membership. The notice must be delivered or mailed to:
....
....
(Insert name and mailing address of health club.)
You may also cancel this contract if you relocate your residence further than twenty- five miles from any health club operated by the seller or from any other substantially similar health club which would accept the obligation of the seller. This contract may also be cancelled if you die, or if the health club ceases operation at the location where you entered into this contract. If you become disabled, you shall have the option of (1) being relieved of liability for payment on that portion of the contract term for which you are disabled or (2) extending the duration of the original contract at no cost to you for a period equal to the duration of the disability. You must prove such disability by a doctor's certificate, which certificate shall be enclosed with the written notice of disability sent to the health club. The health club may require that you be examined by another physician agreeable to you and the health club at its expense. If you cancel, the health club may keep or collect an amount equal to the fair market value of the services or use of facilities you have already received."


The full text of this statement shall be in ten-point bold type.

(b) If a buyer cancels a health club contract pursuant to the three-day cancellation provision or as a result of having moved further than twenty-five miles, or as a result of the health club ceasing operation at the location where the buyer entered into the contract as provided by this chapter, the health club shall send the buyer a written confirmation of cancellation within fifteen days after receipt by the health club of the buyer's cancellation notice. If the health club fails to send such written notice to the buyer within fifteen days, the health club shall be deemed to have accepted the cancellation.

(c) (1) If the buyer notifies the health club that he has become disabled, the health club shall notify the buyer in writing within fifteen days of receipt by the health club of the buyer's notice of disability and any doctor's certificate which may be required under subsection (a) of this section that: (A) The health club will not require the buyer to submit to another physical examination; or (B) the health club requires the buyer to submit to another physical examination and that the buyer's obligations under the contract are suspended pending determination of disability. If the health club fails to send such written notice to the buyer within fifteen days, the health club shall be deemed to have accepted the disability.

(2) If the health club requires the buyer to submit to another physical examination, all obligations of the buyer for payment under the contract will be suspended as of the date the health club receives notice of disability. The buyer's obligations will not resume until such time as a determination is made, either by consent of the buyer and the health club or through adjudicative proceedings, that disability does not exist.

(d) A buyer who is disabled may, at the buyer's option, extend the duration of the original contract at no cost to the buyer for a period equal to the duration of the disability, or remain liable for partial payment on the contract as follows:

(1) A buyer who is disabled for a period less than the full remaining term of the contract shall only be liable for a pro-rata portion of the contract price equal to the total number of weeks specified in the contract less the number of weeks after the date on which the disability first occurred, the difference being divided by the total number of weeks specified in the contract and the result of that division being multiplied by the total contract price.

(2) A buyer who is disabled for the full remaining term of the contract shall only be liable for a pro-rata portion of the contract price equal to the number of complete weeks before the date the disability first occurred for which the services or facilities were made available to the buyer divided by the total number of weeks specified in the contract with the result being multiplied by the total contract price.

(3) If the reasonable probabilities are that the buyer will be disabled for the full remaining term of the contract, and the buyer has elected not to extend the duration of the contract as provided in this subsection, the health club shall cancel the buyer's contract at the time such a determination is made and notify the buyer in writing that the contract has been cancelled.

(4) Any money paid by the buyer which is in excess of the amount for which he is liable under the provisions of this section shall be refunded by the seller to the buyer.

(5) A health club which received notice of disability from a buyer shall provide such buyer with a written form which shall fully explain the buyer's options as set forth in this subsection. Such form shall provide on it a location where the buyer shall indicate in writing the option he has chosen. Such form shall be signed by the buyer and the health club.

(e) In any cancellation of a health club service contract the buyer shall not be liable for any payment to the seller if the services received by the buyer are as a result of a representation by the health club to the buyer that such services are to be received free or if the buyer received services at a health club as a result of a representation by the health club to the buyer that such services are to be received at a reduced or discount price, the buyer shall only be liable as a result of his cancellation for an amount equal to that which was represented to the buyer that he would have to pay.

(f) Any refund to the buyer as a result of cancellation of the contract shall be delivered by the health club to the buyer within fifteen business days of receipt by the health club of the notice of cancellation."

[Samuel Browning]

Here is the statute governing the length of health care contracts in Connecticut. No contracts for more then two years and no automatic renewals:

Sec. 21a-219. "Duration of contract. Renewal. (a) No health club contract shall have a duration for a period longer than twenty-four months. If a health club offers a contract of more than twelve months' duration, it shall offer a twelve-month contract. If a health club sells a membership contract of more than twelve months' duration, the health club shall collect no more than fifty per cent of the entire consideration for the contract in advance of rendering services. The remainder of the cost of the contract shall be collected by the health club on a pro rata monthly basis during the term of the health club contract. Each contract shall have the prices for all contracts printed thereon.

(b) No contract shall contain an automatic renewal clause but may provide a renewal option for continued membership, which option must be accepted by the buyer in writing and may become effective only upon payment of the renewal price.

(c) Each health club shall post the prices and the three-day cancellation provisions, the disability provisions and the twenty-five mile moving provisions of all contracts in a conspicuous place where the contract is entered into." [hmmm, you mean that failure to do so could result in the contract being found null and void because you weren't properly informed of certain information, nice potential loophole :)]

Here is a law regarding the selling of contracts by martial arts schools to third parties.

Sec. 21a-220. "Negotiable promissory notes to be clearly identified. Buyer's rights upon sale or discount. Time period for payment. If the buyer's obligation is in the form of a negotiable promissory note, such contract shall state in boldface type on the face page of said contract that the buyer's promissory note may be discounted and sold to third parties to whom the buyer will become obligated to make full payment. The selling or discounting of a negotiable promissory note which represents the buyer's obligation under a health club service contract shall not affect the right of the buyer to cancel the contract, the method by which cancellation may be made, or the buyer's rights under section 52-572g or Section 433.1 et seq. of Title 16 of the Code of Federal Regulations, as they may from time to time be amended. When a buyer's obligation is in the form of a promissory note, the time period for payment of the note shall not exceed the duration of the health club contract."

[Deadpan Scientist]

awesome job

[Samuel Browning]

On the contact itself there is a complete list of memberships, available prices and:

"List of Equipment and Services

Nautilus, Olympic Free Weights, Wing Chun Wooden Man, Martial Arts Pro Shop, Locker Rooms, Bath Rooms, Showers, Stretch Racks, Focus Pads, Air Shields, Heavy Bags, Jump Ropes", and an an assistant instructor who spends most of his time manning the phone and telling you he's a streetfighter and who qualifies as equipment by virtue of his special status as a tool.

This list is required by Sec. 21a-221. "Listing of equipment and services. A health club which intends to commence the sale of health club contracts, shall, prior to commencing sale, compile a written list of each piece of equipment and each service which it intends to have available for use by buyers and shall submit a copy of the list to the Commissioner of Consumer Protection. Such list shall be included in any health club contract. No health club shall be considered fully operative or established until substantially all of the equipment and services so listed are actually available for use by buyers. Each individual place of business of each health club shall be fully operative or established prior to commencing the sale of health club contracts."

[This raises the interesting possiblity that one could get out of a contract if certain listed equipment was not present. For example one couldn't have a proper Wing Chun dummy without a wooden man. Similarly the following statute indicates that a functioning bathroom is an essential requirement for a health club and that its absence would lead to a breach of contract. So if you can't get out of that contract any other way, when Mr. Sensi is not looking introduce Mr. John to Mr. five pound sledge. I'm joking, I'm joking! The revalant issue is actually if your martial arts school in Connecticut gets it license suspended (with or without you diming them out) are you still ]obligated to pay them, I'd advise a Connecticut client that they could do so, but only after the school exercises its right to appeal and receives a decision by the Commissioner of Consumer Protection. I don't think there is a legal case on point on this issue, but if the club has its license revoked, and it shouldn't be doing business, how can they continue to charge you when they can't be engaging in business lawfully?]

Sec. 21a-223. "License required. Fee. Renewal. Sanitary facilities. Suspension or revocation of license. (a) Each individual place of business of each health club shall obtain a license from the Department of Consumer Protection prior to the sale of any health club contract. Application for such license shall be made on forms provided by the Commissioner of Consumer Protection and said commissioner shall require as a condition to the issuance and renewal of any license obtained under this chapter (1) that the applicant provide for and maintain on the premises of the health club sanitary facilities; (2) that the application be accompanied by (A) a license or renewal fee of two hundred dollars, (B) a list of each piece of equipment and each service which the applicant intends to have available for use by buyers during the year of operations following licensure or renewal, and (C) two copies of each health club contract which the applicant is currently using or intends to use; and (3) compliance with the requirements of section 21a-226. Such licenses shall be renewed annually.

(b) No health club shall (1) engage in any act or practice which is in violation of or contrary to the provisions of this chapter or any regulation adopted to carry out the provisions of this chapter, including the use of contracts which do not conform to the requirements of this chapter or (2) engage in conduct of a character likely to mislead, deceive or defraud the buyer, the public or the commissioner. The Commissioner of Consumer Protection may refuse to grant or renew a license to, or may suspend or revoke the license of, any health club which engages in any conduct prohibited by this chapter.

(c) If the commissioner refuses to grant or renew a license of any health club, the commissioner shall notify the applicant or licensee of the refusal, and of his right to request a hearing within ten days from the date of receipt of the notice of refusal. If the applicant or licensee requests a hearing within ten days, the commissioner shall give notice of the grounds for his refusal and shall conduct a hearing concerning such refusal in accordance with the provisions of chapter 54 concerning contested matters.

(d) The Attorney General at the request of the Commissioner of Consumer Protection is authorized to apply in the name of the state of Connecticut to the Superior Court for an order temporarily or permanently restraining and enjoining any health club from operating in violation of any provision of this chapter.

[Gee, look at the statute below, if the health club is in "material violation" the buyer has the right to cancel the contract. There are of course arguments about what material means. If the john is non-functioning for a month that would probably be a material violation on the part of the health club. Jaming the john with toilet paper for an evening would not count. See the requirement "(1) that the applicant provide for and maintain on the premises of the health club sanitary facilities"]

Sec. 21a-222. Right of action. Remedies. (a) Any buyer of a health club contract which is in material violation of this chapter has a right to cancel the contract and a right of action against the health club for recovery of triple the amount actually paid to the health club under the contract. In addition to any judgment awarded to the buyer, the court may allow reasonable attorney's fees.
(b) A violation of any of the provisions of this chapter shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

[Samuel Browning]

Here is the release I signed many moons ago:

"Release and Waiver of Liability

In consideration of services to be received as a student on these premises, the undersigned hereby releases and discharges [Omega], it heirs, successors, administrators, [ex-wives] and assigns from any any and all actions, cause of actions, liability, claims and demands upon or by reason of of any damage, loss, injury, or suffering, known and unknown which may be substained by [John Perkins] in connection with and in course of receiving Martial Arts training and techniques on these premises from the instructor or instructors, staff, official, or employees of this school or any fellow students on the premises in connection therewith and within the course of taking training or lessons for the purpose designed in the application regardless of any negligence on the part of anybody except due to the intentional act on the part of the offender."

[In drawing up such a release the drafter needs to make two important decisions. Some draw up a waiver that frees them from responsibility in the event of even death or permanant disability cto try to pre-emptively convince the student that they are precluded from filing any lawsuit for injury. Others like myself prefer a more business like, if vaguer, all inclusive language which essentially means the same thing. Injuries can be inflicted under four circumstances: an accident with no one violating the appropriate standard of care, negligence, recklessness, and intentional conduct. This release protects against negligent and reckless (though unintentional conduct) and does not try to waive actual intent to injure which is hard to prove if the assailant does not proclaim his intent, and say, acts under the cover of an approved sparring match. The danger in producing a waiver that prohibits suit even in the case of intentional assualt is that courts have been known to reject such waivers on the grounds that they are overbroad and therefore not enforceable. When I look up the applicable Connecticut caselaw I'll update this post, but I suspect that since the drafter otherwise did their job properly, there is a court ruling in Connecticut stating that waivers of liability in Connecticut cannot be unconditional.]

[WingChun Lawyer]

"I don't think there is a legal case on point on this issue, but if the club has its license revoked, and it shouldn't be doing business, how can they continue to charge you when they can't be engaging in business lawfully?"

I am just jumping in (sorry, I don´t have the stamina to read all this right now), but if the client decides not to pay, wouldn´t that constitute a breach of good faith, even if he didn´t know the gym´s license was suspended?

[Samuel Browning]

He'd have to know the gym's license was suspended in order to successfully use this argument. He'd have to have a legally approprate rationale before stopping payment.

[WingChun Lawyer]

Interesting...in Brazil, we have a procedure rule when arguing consumer´s rights: the judge may invert the need to provide proof of a certain fact, if he considers it would, according to the circunstances, be hard or impossble for the consumer to provide proof of his allegations.

This means that, in practice, the provider of goods or services may have to prove that HE did not harm the consumer or his interests, as opposed to the usual procedure rule demanding that the one who makes an allegation shall be the one to provide proof of its veracity.

Is there a similar rule over there? It could help the consumer prove his point when arguing about a possible lack of compliance with the local laws on the part of the gym´s owner.

[Samuel Browning]

I am not aware of such a rule WCL, in certain consumer's actions such as this, if the seller broke the laws I cited, the consumer could be awarded triple damages. I like your country's evidentiary rules better in this instance. I'd rather have a relaxed standard of evidence rather than increased damages.

[supercrap]

Awesome job as usual Samuel.

I have never had to sign anything like that in the 3 or 4 schools I have spent time in, and I hope I never have to.

[Antagony]

Lawyers sure do get off on some weird shit!

Just kidding. Good work.

[Mr. Mantis]

No contracts, no kids... those are the rules.

Originally posted by Samuel Browning
The danger in producing a waiver that prohibits suit even in the case of intentional assualt is that courts have been known to reject such waivers on the grounds that they are overbroad and therefore not enforceable.

In addition, waivers that purport to waive rights of recoupment to intentional torts are against public policy and thereby unenforceable, giving one the opportunity to have the document stricken from the evidence.

[Mr. Mantis]

Originally posted by WingChun Lawyer

Is there a similar rule over there?

Not to my knowledge. However, when dealing with contracts, if there is an ambiguity in a term, it is read AGAINST the interest of the drafter, who is usually the seller.

Its a general rule of construction.

[WingChun Lawyer]

Thanks for your time, Mr. Mantis and Samuel. I asked because the brazilian consumer´s code was drafted in 1990, and, as I remember, it was supposedly heavily influenced by similar laws in the USA.