VIC Gym Membership - Does Contract Law Protect Life Foundation Member Rate?

[Georgina]

I joined a gym several years ago as I was offered foundation membership at a low rate for life. The gym has changed hands several times, but the rate has never changed. Recently, I was contacted to sign a new contract at a higher rate. Are they able to do this? Is a "rate for life" applicable even if the ownership has changed, or as new owners are they obliged to take over the existing contracts as per contract law?

 

[John R]

Hi Georgina,

1. The answer is that "it depends".
2. Do you know if the new owners purchased the gym including memberships (they generally do)? If yes, and as a general rule, my understanding is that the new owners are obligated to honour the terms and conditions of your existing membership contract.
3. Do you have a copy of your original gym membership agreement? If yes, you may consider reviewing your membership contract to understand the terms of any "change of ownership" clause/s.
4. I understand that you are in Victoria. Consumer Affairs Victoria (CAV) have been proactive in taking action against gyms with unfair contract terms and you may also consider also calling CAV if the new owners continue to insist on you signing a new contract.

Hope this helps. Please keep us updated with your progress.

 

[DennisD]

I agree with John R's point 3 in particular. Look for a clause with 'change in control' for its heading. It should say what happens if, for example, there's a change in the beneficial ownership or control of the company or the company disposes its significant assets other than in usual business, or may use similar wording. As a start anyway, you can look here and see what it says.