In the case of Consumer Affairs Victoria
versus Craig Langley Pty Ltd & Matrix
Pilates and Yoga Pty Ltd, the following
term popped up in membership
agreement:
terms of the membership agreement
were unfair, Judge Harbison also
criticised the drafting of the membership
contract by stating that: ‘the documents
constituting the Matrix Membership
Agreement are not clearly expressed…
because those documents when read
together create confusion, uncertainty,
or doubt.’
‘In the event that you do not pay the
amount payable under this Agreement
within 31 calendar days of the due
date expressed on the Agreement, the
Club and the Billing Agent may at their
discretion terminate the Membership
and this Agreement.
This case study highlights the importance
of ensuring that membership contracts
are carefully drafted so that critical
terms, such as those relating to payment
defaults, can be enforced and that the
business is protected against risk to the
greatest extent possible.
Upon such termination of this
Agreement, all amounts outstanding
shall become immediately due and
payable without further notice of
demand.’
IN CONCLUSION…
has understandably drawn the attention
of business owners in the industry.
CASE STUDY
There were a range of reasons provided
by the judge in the matter, as to why the
terms of the membership contract were
unfair (and therefore unenforceable),
including:
1.
2.
Victoria have publically stated that
it ‘considers all these consequences,
whether applied individually or in
combination, to be unfair, regardless of
whether the consumer paid upfront or
is paying in instalments.’ This statement
the member was penalised for
a breach or termination of the
contract, however the yoga studio
was not penalised if they breached
or terminated the contract. This
created a “significant imbalance”
in the rights and obligations of the
parties; and
the contract assumes that the
member has failed to pay their fees
on time without having a justifiable
reason for doing so, and such a
term would “effectively prevent
a consumer from withholding
payment even if the trader does not
fulfil its part of the bargain”.
Also, in addition to determining that the
Reviewing the terms of your standard
form membership contract is like
stretching. Perhaps a little bit boring, but
you are likely to get hurt if you don’t do it
properly.
TAP HERE FOR MORE ADVICE
FROM SCOTT MCKENZIE FROM
MILLS OAKLEY
Membership Contracts:
How To Protect Your Club
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The ‘Vive’ Of Your Gym?
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