Difference between revisions of "Fitness Centres, Yoga Studios, and Other “Continuing Service Contracts”"
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This script first discusses door-to-door sales, fitness club memberships and other similar contracts, and how you can cancel if you want to back out. Then it discusses time-shares and time-share contracts.
What is a “future performance contract”?
Perhaps you’ve signed a contract with someone who came to your home and sold you a magazine subscription or a vacuum cleaner, or you’ve entered into a contract for home repairs. Or perhaps you’ve gone out and signed up to join a health club. Under the Business Practices & Consumer Protection Act, these are known as “future performance contracts.” Most door-to-door sales and similar contracts are “future performance contracts”.
A future performance contract is one where you don’t receive the goods or services or the payment isn’t made in full when you sign the contract. For example, you agree to buy a vacuum cleaner and pay it off over six months. Or you agree to buy an encyclopedia set which will be delivered in installments. Or you agree to join a health or fitness club and pay a monthly membership fee. Contracts under $50 aren’t considered future performance contracts.
A future performance contract must include certain things
If the total purchase price is $50 or more, the Business Practices & Consumer Protection Act lists all the information the contract must include to be legally binding. Among other things, the contract has to be a written contract signed by you, and it must:
- show the date
- include the name, address and telephone number of the seller
- describe the goods or services
- show other costs, including taxes and shipping charges, as well as the total price
- include a detailed statement of the terms of payment
You must be given a copy of your contract within 15 days after signing it. If the contract you get doesn’t contain all of the things listed in the Business Practices & Consumer Protection Act, then you have up to a year to cancel the contract.
Special rules apply to two types of future performance contracts
The two types of future performance contracts are:
- direct sales contracts
- continuing sales contracts
What is a “direct sales contract”?
A direct sales contract is a contract signed at a place away from the seller’s permanent place of business, for example, at your home. There’s a limit to the down-payment the seller can ask from you. If, for example, you buy a vacuum cleaner from a door-to-door salesman who comes to your home, the direct seller can’t ask for a down-payment of more than $100 or 10% of the purchase price, whichever is less. But if you invite a supplier into your home more than 24 hours in advance, then a contract signed with the supplier isn’t a direct sales contract.
What is a “continuing services contract”?
A continuing services contract is a contract where you receive services over a period of time, rather than all at once. It is limited to contracts for dance lessons, personal training (i.e., a boot camp), weight loss programs, self defence lessons, and gym and travel club memberships. A continuing services contract must not be for longer than 24 months.
Can you cancel these contracts?
Yes. Whenever you sign a direct sales contract or a continuing services contract, the law gives you up to ten days to cancel the contract after receiving a copy of it. In fact, the contract itself has to state that you have this right to cancel at any time within the ten days.
What if you don’t receive the goods or services?
If it’s a direct sale, and you don’t receive the goods or services within 30 days, you have up to a year to cancel. So if you don’t receive the promised vacuum cleaner within 30 days or the fitness club isn’t ready to be used within 30 days, then you have up to one year to cancel, so long as you don’t accept the goods or services later.
What if circumstances change?
For a continuing services contract, you can also cancel if there’s been a material change in the services that the seller was going to provide to you or in your personal circumstances. For example, you signed up for tango lessons and the seller now only offers tap dancing classes, or you moved more than 30 kilometres away and the business can’t provide the same service in your new location, or you signed up for boot camp but broke your leg. In each case, you would have to show proof of the material change to cancel the contract (for example, proof of your new address or medical documentation explaining the medical reasons why you can no longer participate in the activity).
How do you cancel?
It’s best if you cancel the contract in writing – by fax, e-mail or registered mail, or by delivering a notice to the seller indicating that you’re cancelling. Just be sure to keep a copy and proof of delivery that you cancelled within the allowed time.
Will you get your money back?
If you cancel the contract within ten days, you’re entitled to a full refund of your money within 15 days after cancelling – even if you’ve already received the vacuum cleaner or started going to the fitness club. Once you’ve received your money back, you must return the vacuum cleaner.
Can you cancel a continuing services contract partway through?
If you cancel because there’s a significant change in your personal circumstances – like being seriously injured or moving to another city – you’re entitled to a pro-rata refund based on how much of the service you’ve used, less 30% to cover the seller’s costs. If you cancel because the seller’s services have changed – like offering different dance lessons or moving their dance studio – you’re entitled to a straight pro-rata refund without any deduction.
What happens if the seller doesn’t give you a refund?
Then you can sue for a contract debt, normally in Small Claims Court. If you win, the seller must pay you three times the amount of your refund.
Time-sharing is a legitimate form of owning an interest in property. Often, the time-share is for one week of time or use at a vacation resort. Typically, you go to a presentation, tour a condo unit and then sign a contract. But before you sign anything, make sure the deal is right for you. And don’t sign a contract unless you understand it completely.
BC’s Real Estate Development Act says that if you make the contract here in BC, and later decide you acted too quickly, you can back out of the contract if you cancel within seven days. This applies whether the time-share relates to property in or outside of BC. However, and this is very important, if you sign a deal outside of BC, say in Mexico for a Mexican time-share, BC’s Real Estate Development Act won’t apply, and the law of that country will apply.
Where can you get help or more information?
- To help protect against unscrupulous sellers, check the seller’s record with the Better Business Bureau, available online. For mainland BC, the website is http://mbc.bbb.org (telephone 604.682.2711). For Vancouver Island, the website is http://vi.bbb.org (telephone 250.386.6348).
- Visit the Consumer Protection BC website at www.consumerprotectionbc.ca or contact them by phone at 1.888.564.9963.
- To learn more about BC’s consumer protection laws, read the Business Practices & Consumer Protection Act, available online at www.bclaws.ca or at your local law library.
[updated January 2013]
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